NEW YORK, April 16: Cotton futures settled mixed on Friday as switch trade from players moving positions out of May pressured the nearby months and the trade kept tabs on options expiration, brokers said. The New York Board of Trade’s key May contract eased 0.08 cent to conclude at 52.06 cents a lb, moving between 51.90 and 52.35 cents. July shed 0.20 to 53.14 cents. The rest increased 0.05 to 0.25 cent.
Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida, said most players were trying “to get the May (contract) out of the way” before it goes into its delivery period on April 25.
The difference between May and July now stands at 1.08 cents, compared to 1.20 cents at the close on Thursday.
Open interest in May fell 4,100 lots to 35,189 lots as of April 14 while interest in July rose 3,390 lots to 69,430 contracts.
Dealers said most players were also trying to keep the May contract close to 52 cents going into options expiration.
Weathersby said that once the May contract is out of the way, market participants can gauge the prospects for the new crop especially when the US Department of Agriculture releases its monthly supply/ demand report next month.
That report will contain the first look by the USDA at supply/demand factors in the 2005/06 marketing year (August/July).
“The old crop is winding down and once May gets off the board (on May 6), we’ll have a better idea of what direction the market should go,” a trader said.
Brokers Flanagan Trading Corp. put support in the May contract at 51.70 and 50.80 cents, with resistance at 52.50 and 53.10 cents.
Floor dealers said estimated volume stood at 18,000 lots, down from Thursday’s count of 27,154 lots. Open interest fell 728 contracts to 124,824 lots as of April 14. —Reuters
