"We've got first notice day coming up," said Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida. He added that the transfer of positions out of front March "seems to be smooth so far."
Open interest in March fell 3,893 lots to 4,214 contracts as of February 17. Most dealers expect eventual open interest by the time deliveries get under way on February 22 to range from 1,000 to 2,000 lots.
Weathersby said the market will take a renewed look at fundamentals once the delivery process is concluded. The March cotton contract is due to expire on March 8.
A report by Sharon Johnson, cotton expert for Frank Schneider and Co Inc in Atlanta, Georgia, said that "if sufficient export interest surfaces, futures may yet push up to their highs of mid-January (of 49.25 cents, basis May) before correcting."
The market will also be looking ahead to the US Department of Agriculture weekly export sales data to see if stronger sales are reported now that the Lunar New Year in Asia is over.
Brokers Flanagan Trading Corp sees resistance in the March contract at 46.60 and 47.50 cents, with support at 46 and 45.35 cents.
Floor traders said final estimated volume stood at 17,500 contracts, from Thursday's tally of 19,938 lots. Open interest in the cotton market fell 817 contracts to 88,527 lots as of February 17.