Mumbai, 28 May (Commoditiescontrol): ICE Cotton futures settled lower, led by December contract falling the most, as traders queue up for long liquidation ahead of extended week-end. The market will be closed on Monday in observance of Memorial Day but will reopen Monday night.
July cotton settled at 139.42 cents, down 1.19 cents, December closed at 122.95 cents, down 1.38 cents and March 2023 finished at 118.73 cents, 0.81 cent lower; estimated volume was 21,363 contracts.
Spot July breached the $1.40 mark for the first time in 21 days and, given that its delivery is pending in three weeks. The contract is expected to slide even lower on call fixation and long liquidation.
As of the close Friday, spot July was down 2.85 cents for the week, down 6.21 cents thus far the month, but still up 31.54 cents on the year.
For December, it continues to hang on the West Texas weather forecasts. Right now, the one- to five-day outlook shows no rain, while six- 10-day does allow better rain chances.
Meanwhile, ICE has reverted cotton futures daily price limit to 5 cents per pound effective from start of trade on Tuesday, May 31.
On wheather front, the U.S. Drought Monitor continues to show West Texas in its "extreme to exceptional drought" category. In fact, despite recent southwestern rains, northern Oklahoma and the Texas Panhandle have moved from abnormal dryness and moderate to "exceptional drought" ratings.
USDA’s weekly Cotton Market Review showed the 1,832 bales sold at spot this week averaged 137.47 cents/lb.
As per the CFTC's commitment of traders (CoT) report, the highly watched managed-money funds had reduced their net long position below the 70,000-contract mark.
The Cotlook A index was up 350 points on May 26 to 163.20 cents. USDA’s FSA reduced the week’s adjusted world price for cotton by 3.38 cents to 139.86.
Cotton #2 Jul'22 contract may find support at 138.32 cents and resistance near 141.26 cents.
(By Commoditiescontrol Bureau: +91-22-40015505)
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