The key March cotton contract fell 0.44 cent to close at 71.64 cents per lb, dealing from 71.53 to 72.64 cents. Volume traded in the March contract hit 10,279 lots at 2:40 pm EST (1940 GMT). "The market is still under the technical pressure (from last week)," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
He said the March contract would need to get over the Tuesday high so that "it can stabilise." But analysts said that might be tough to accomplish at this time and a probe toward the psychological downside target of 70 cents seem more likely in the days ahead. "There's a better chance for cotton to go down to 70 cents although there is pretty good mill fixation-type buying at the lows," a dealer said.
The weekly report by Nunn Cotton Co illustrated how much pressure cotton could face. "In the three weeks since Christmas the specs have liquidated nearly 12,500 contracts, thus indicating that they are taking profits and looking," the report said. "However there is still a significant net long position of some 41,000 contracts, and if that position begins to liquidate, cotton could move lower," Nunn concluded.
Brokers Flanagan Trading Corp sees resistance in the March contract was at 72.85 and 74.05 cents, with support at 71.05 and 70.35 cents. Total volume traded Friday hit 12,378 lots, against the previous 15,924 lots, according to data from ICE Futures US Open interest stood at 178,163 lots as of January 15, from the prior count of 181,154 lots, the exchange said.