NEW YORK, Oct 31: NY cotton futures finished mixed on Tuesday in modest dealings, as the market consolidated further after tumbling last week to near 30-year lows, with more sideways action expected this week.
The key December cotton contract slipped 0.02 cent to finish at 28.92 cents a lb, moving in a tight 28.55-28.99 cent trading band.
March inched up 0.01 cent to end at 30.58 cents.
Except for two contracts, distant months were flat or 0.05 cent easier.
It looks like we’re just consolidating in a sideways mode, said Sharon Johnson, cotton expert of Frank Schneider and Co. Inc. in Atlanta.
Dealers said trade pressure knocked the market down from the highs, although there were precious few leads to give cotton futures any kind of direction.
Prices are hemmed in, with trade buying at the lower levels and trade selling near the highs, said Mike Stevens of Swiss Financial Services in Mandeville, Louisiana.
Smaller speculators cautiously waited for the picture to clear up but would like take the long side of the market if the December cotton contract can take out 29.20 and March pierces the 30.80 cent barrier, the brokers said.
Traders said it was encouraging the market had not sustained more losses after the New York Board of Trade (NYBOT) weekly spec/hedge report showed the funds holding a net short position of 26.6 per cent.
The funds could have increased their shorts, but it’s getting some good support here for now, a broker said.
It was the first time the spec/hedge data were released after plane attacks destroyed the NYBOT’s offices and trading floor at 4 World Trade Center last month. In the last spec/hedge report, the funds were net short 29 per cent.
On another matter, the Cotlook A Index used by the trade as an indicator of global cotton demand was quoted flat at 34.95 cents.
Technicians said support in the December cotton contract should be at 28.50 and 28 cents. Near-term resistance would be at 29 and 29.50 cents.
Floor dealers estimated final volume traded at about 5,800 lots, from the prior tally of 5,699 lots.—Reuters