NEW YORK, April 12: NY cotton futures ended slightly higher Friday, with brokers saying back months were amply supported by fund and options-related buying which may spill over into the following week, analysts said.
May cotton rose 0.08 cent to close at 58 cents a lb, trading 57.60-58.10 cents. July rose 0.09 to 59.77 cents. Except for one contract, the back months increased 0.20 to 0.83 cent.
It’s just sideways consolidation, said Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida.
Keith Brown, president of commodity trading firm Keith Brown and Co. in Moultrie, Georgia, said most market operators were seemingly content to keep May near the suspected strike price of 58 cents.
He added that options-related and fund buying seemed to be giving the back months solid support.
Most of the deals were spreads although there was some spec and fund buying coming in, a floor dealer said while adding follow-through purchases may provide futures a slight boost into next week.
But traders said any advance may eventually be scuppered for now by the fact that rollovers would be needed to liquidate the large open position in the May contract before first notice day on April 24.
Open interest in May fell 4,017 lots to 30,872 lots as of April 10. There are seven trading left before first notice day, with dealings next week shortened by the Good Friday holiday.
The weekly marketing outlook of O.A. Cleveland said the overall trend in the market over the longer-term remains positive.
The easier path is higher, but without any significant shocks, only some 3.00 to 5.00 cents higher. With certificated (cotton) stocks again near 400,000 (480-lb) bales, the mid-60 cents level represents a near iron lid over prices, he said.
Technicians said they believe support in the May contract is at 57.60 and 57.10 cents. They forecast resistance at 58.20 and then 58.80 cents.
Floor sources said estimated volume stood at 20,000 lots, versus the prior tally of 21,427 lots. Open interest in the market rose 419 lots to 81,264 lots as of April 10.
WASHINGTON: World end stocks of cotton for the 2002/03 marketing year are expected to be at the lowest level since 1994/95 and are down nearly 25 per cent from the record 47.9 million-bale ending stock level in 1998/99, the US Department of Agriculture said on Friday.
Much of the decrease in recent years, USDA said, is due to lower stock levels in China, where 2002/03 ending stocks are forecast at 9.3 million bales, down 28 per cent from the previous year and down 60 per cent from 1998/99, USDA said.
While US ending stocks for 2002/03 are forecast to be down 15 per cent from the previous year, they are still nearly double the average seen during the 1990s, USDA said.—Reuters
