Friday's close was the lowest level for cotton on the spot daily charts since November 19. Volume traded in the March contract hit 10,434 lots at 2:40 pm EST (1940 GMT). "There's not a clue to what it's going to take to get a bounce," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana. "The momentum is still with the bears." The market's main feature is straightforward.
Investor and speculative liquidation is putting pressure on fiber contracts, but the trade and mill buying would try to support the market, analysts said. Since trading as high as 76.77 cents on January 4, 2010, the benchmark cotton contract declined 7.94 cents to its session low of 68.83 cents on Thursday. That represented a fall of 10.34 percent between January 4 and January 28. A top source of pressure for cotton has come from weak outside markets like equities, crude and grains.
Stevens said the behaviour of cotton has little to do with its fundamentals since futures have ignored large US cotton sales reported by the US Agriculture Department. In the last USDA export sales report, US cotton sales hit 503,000 running bales (RBs, 500-lbs each) over the last week, from 356,500 RBs in last week's report.
US cotton upland sales hit a marketing year high of 487,500 RBs, with top consumer China purchasing 285,300 RBs. Brokers Flanagan Trading Corp sees resistance in the March contract at 69.50 and 70.35 cents, with support at 68.60 and 67.80 cents. Total volume traded Thursday hit 21,710 lots, against the previous 18,492 lots, according to data from ICE Futures US. Open interest in the cotton market stood at 169,704 lots as of January 28, from the prior count of 169,924 lots, the exchange said.