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NYCE cotton settles off as market takes breather

NEW YORK: NYCE cotton prices finished with only minor losses Friday as futures took a break after rallying in the preceding two sessions off support.

"This is a little running correction" after the rally we've had, said Keith Brown, president of commodity trading firm Keith Brown and Co. in Multrie, Georgia.

Key July cotton slipped 0.48 to end at 58.22 cents a lb, trading 59.20-57.90 cents.

Over the last two sessions, the market had bounced solidly from support after July touched a session nadir on Wednesday of 55.75 cents. The contract closed Thursday at 58.70 cents.

Spot May cotton eased 0.39 to 56.43 cents.

New crop December shed 0.31 to 60.09 cents.

The rest retreated between 0.61-0.15 cent.

Floor sources said early speculator interest enabled cotton to pop to the session peak shortly after the start of business, but trade sales and local long liquidation gradually led the market into negative territory.

Brown said the steep losses suffered by the Dow 30, which was down more than 550 points at the time the cotton market closed, probably diverted attention from cotton.

Traders said that aside from the pressure brought to bear by the trade and locals, the lack of interest in futures also weighed on the market.

"There was just no willing buyer in this deal," said Brown.

Further losses were limited somewhat by an increase in the Cotlook Index A futures by 0.30 to 58.80 cents. The A index is taken by the trade as an indicator of global cotton demand.

But the overall tone of the market was subdued.

"It was fairly quiet," Brown said.

Traders said they feel resistance in July cotton will be found at 59 and then the recent peak of 59.25 cents whilst support should emerge at 57.90 cents.

Volume reached an estimated 6,500 lots against the previous volume of 14,464 lots.

The NYCE is a subsidiary of the New York Board of Trade.-Reuters