"The market has been up (of late). People are trying to even up a little bit. It's a new tax year and maybe some people have decided to take some profits," said Sid Love, commodity trading advisor at Kansas-based Sid Love Consulting. Higher demand for US cotton, speculative buying and a rally in oil prices fueled the gains in rates for the fiber over the past couple of months, according to analysts.
Cotton futures marked a 3-1/2-year high of 79.45 cents a lb. last week. "There was profit-taking by speculators," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
Speculators lifted a bullish bet by 6,280 contracts to 98,318 contracts in cotton in the week to December 26, the Commodity Futures Trading Commission data showed on Friday. The International Cotton Advisory Committee (ICAC) lowered its cotton inventory forecast for the 2018/19 crop year. Total futures market volume rose by 9,758 to 30,520 lots. Data showed total open interest gained 3,692 to 282,689 contracts in the previous session.