NEW YORK, Oct 13: NY cotton futures settled easier on Friday on broad sales as fears of a recession continued to deflate fiber prices, and USDA’s monthly production data contributed to the market’s poor outlook.
It was a general sell-off, said Frank Weathersby of Affinity Trading in Destin, Florida, adding the malaise seen in cotton futures should be blamed on an economy that likely tipped over into recession following the Sept 11 attacks in New York and outside Washington.
December cotton settled off 0.16 cent at 32.01 cents a lb after trading 31.31-32.15 cents. March fell to a new lifetime low of 32.70 cents before closing 0.25 cent softer at 33.47 cents. Distant months touched new contract lows and eventually posted losses of between 0.17-0.55 cent.
Carole Carter of the Jernigan Group-FIMAT in Nashville, Tennessee, said trade pressure kept the market on the defensive for most of the session, and knocked cotton back when it attempted to recover from the lows.
All-around sales pressured cotton futures from the start, sending distant months skidding to new lifetime lows, floor brokers said.
In an indirect manner, traders said the scare over anthrax in New York following the trauma suffered by Americans in the Sept 11 aerial assaults kept the mood among market operators on the defensive.
Traders said bearish USDA monthly supply/demand data, while expected, nevertheless confirmed the glum outlook faced by fiber prices.
USDA raised world cotton ending stocks in 2001/02 to 43.26 million (480-lb) bales from last month’s estimate of 42.73 million and reduced global cotton consumption to 92.08 million bales against 92.55 million.
The report gave no support to the market, said Weathersby.
There was supposed to be some 300 millers from around the world coming over to attend the conference, but it’s been reset given the kind of security environment we are facing, a cotton trader in a state in the US West said.
Cotton market economist O.A. Cleveland said in a weekly report that the market’s near-term future does not hold much promise.
Final volume at 8,500 lots, compared with Thursday’s tally of 7,594 lots.—Reuters