0
NEW YORK, Jan 18: NY cotton futures finished easier on Friday as small speculators sought to press the market south although solid trade buying at the lows prevented fiber contracts from sinking any lower.
Key March cotton tumbled 0.89 cent to end at 50.63 cents a lb, trading 50.57-51.70 cents. May fell 0.76 to 54.30 cents. The rest of the board retreated 0.55-0.85 cent.
It’s local pressure. They’re looking for stops down here, said Alan Feild of brokers iamhedged.com in Memphis, Tennessee.
Futures popped to session highs at the start of business, but the small speculators then took over and pressed the market remorselessly lower, floor sources said.
Robust attempts by the locals to push the market south would then run into a thicket of trade buying and suspected mill fixations at the lows which prevented futures from falling further, they said.
The trade is sitting every few points down and really putting a cap on every attempt by the locals to get it lower before the long weekend, a leading dealer said.
The market will be closed Monday for the Martin Luther King Jr. holiday. Trading resumes Tuesday.
Analysts said trade accounts and the mills are getting anxious at the seeming inability of the cotton market to break lower because they have less than ample coverage going into the second half of 2003.
Carl Anderson, extension economist for Texas A&M University, had said the trade and the mills are hoping for lower prices, but they’re not sure if they’re going to get them.
Brokers Flanagan Trading Corp. in North Carolina said US mills are still experiencing weak demand and are not likely to become panic buyers.
To move higher, therefore, merchant buying will have to provide the power and that is only likely if China starts buying cotton in a serious way.
Flanagan sees support in March cotton at 50.50 and 49.80 cents, with resistance at 51.80 and 52.30 cents.
Estimated final volume reached 9,000 lots against the previous tally of 5,047 lots.
Open interest reached 87,069 lots as of Jan 16, up 580 lots.—Reuters
