The cotton market will be closing 75 minutes early on Friday at 1:00 pm EST (1800 GMT). The market is shut Monday for New Year and trading resumes on Tuesday.
The New York Board of Trade's key March cotton contract fell 0.42 cent to end at 53.65 cents a lb, in a band from 53.50 to 54.55 cents. May shed 0.32 to 54.34 cents. The rest declined 0.40 or 0.45 cent.
"It's been spec and fund buying against trade selling. It's very clear cut," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia.
Brokers said speculative fund accounts were trying to nudge cotton past the top of its band around 54.50 cents, basis March, but trade accounts were aggressively selling the market and paring its gains.
When March failed to make much headway at the top of the band, small speculators dumped cotton late, dealers said. The key March cotton contract has been moving in a range running from 52.50 to 54.50 cents band.
"I think the specs and funds like it here and they're looking for (automatic computer generated buy orders) stops in the market," a dealer said.
Fundamentally, the trade is looking toward the last trading day of the year to get a further handle on the level of global demand for cotton.
They will look at the US Department of Agriculture's weekly export sales report. Cotton brokers said they expect total US cotton sales for 2005/06 and 2006/07 at 225,000 to 300,000 running bales (RBs, 500-lbs each). The USDA said upland cotton sales last week hit 293,000 RBs.
US cotton shipments of previously booked orders are seen ranging from 250,000 to 300,000 RBs, from last week's 283,600 RBs.
Brokers Flanagan Trading Corp sees resistance in the March contract at 54.05 and 54.65 cents, with support at 53.20 and 52.45 cents. Floor dealers said estimated final volume amounted to 12,000 lots, from the prior tally of 7,511 lots. Open interest rose 456 lots to 104,707 contracts as of December 28.