March 26, 2006	Sunday	Safar 25, 1427

NEW YORK, March 25: Cotton futures settled easier Friday on modest speculative sales as its brief bounceback stalled, and analysts said near-term direction is uncertain. The New York Board of Trade’s May cotton contract shed 0.49 cent to close at 52.50 cents a lb, trading from 52.38 to 52.90 cents. It was an inside day as the range held within Thursday’s 52.02 to 53.15 band.

The market has recovered and subsequently pulled back since ending on Wednesday at 52.22 cents in the lowest close for cotton on a spot basis since trading below 50 cents in December 2005.

July fell 0.37 to 54.08 cents. The rest declined from 0.05 to 0.30 cent.

The specs were back and pressing on the short side (of cotton), said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.

Stevens said the market faltered when cotton futures showed it did not “have the follow-through excitement” of buying which could have hoisted prices higher.

Traders said when that happened, fiber contracts sagged on speculative sales although losses were limited by scale-down consumer and trade buying in the market.

Stevens said the market would need to get over 53.40 cents, basis May, to confirm that a low in the market is at hand following several sessions when speculators dumped cotton.

We have the first step of a possible low in place but the same appeared to be case two weeks ago so I want to give it another day or two for confirmation, added a report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta.

Fundamentally, the market is now turning its attention to spring growing conditions in the United States.

The US Agriculture Department will be releasing its annual potential plantings report on March 31.

Brokers Flanagan Trading Corp. put resistance in the May cotton contract at 52.75 and 53.30 cents, with support at 52.10 and 51.70 cents.

Floor dealers said final trading volume was estimated at 15,000 lots, down from Thursday’s count of 22,815 lots. Open interest rose 893 lots to 138,499 contracts as of March 23. —Reuters