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NY cotton ends near 3-year low for 3rd session in a row
June 5, 2012 / 6:47 PM / 5 years ago

NY cotton ends near 3-year low for 3rd session in a row

 * Cotton at lowest level since early October 2009
 * Abundant supplies, poor macro outlook weigh on cotton
 June 5 (Reuters) - Cotton futures ended down Tuesday near a
3-year low for the third consecutive session in the face of
bumper supplies and a weak global economic outlook, said brokers
who expected the market to remain on the defensive.  	
 "Cotton still suffers from too much supply and the fear of
Europe," said Keith Brown, president of commodity firm Keith
Brown and Co in Moultrie, Georgia.	
 "I just want to sit on my money," he said of the attitude of
most investors spooked by the deepening debt crisis in Europe
and a downbeat outlook for both the United States and China, the
world's top two economies.	
 The euro zone debt crisis showed signs of escalating after
Spain said it was being shut out of credit markets. 	
 The now benchmark December cotton contract on ICE
Futures U.S. fell 1.70 cents, or 2.5 percent, to close at 65.36
cents per lb, dealing between 65.26 and 67.69 cents. It was an
inside day as that trading range held within Monday's 64.61 to
67.95 cents band.	
 It was the lowest close for the third position cotton
contract since early October 2009, Thomson Reuters data showed.	
 Spot July cotton lost 1.64 cents to finish at 66.89
cents a lb, moving from 66.79 to 69.85 cents.	
 Cotton's 14-day relative strength index reading, an
indicator of a market's being oversold or overbought, stood at
19 versus 21 on Monday.	
 A reading of 30 or lower means the market is oversold and
one of 70 or above indicates a market is overbought.	
 "The market is so heavily oversold, but I don't think it
really matters to the funds," a dealer said.	
 Some mill fixation buying was seen at the market's low, but
most commercials shied away in anticipation of lower values.	
 Open interest, an indicator of investor interest, amounted
to 203,711 lots as of June 4, the loftiest since Feb. 10, 2011,
when open interest was at 220,096 lots, the ICE data showed.	
 "Prices are falling and open interest is going up. A lot of
short positions are being added to cotton," a dealer said of
investor bets for lower prices.  	
 Volume on Tuesday reached almost 36,000 lots, almost 50
percent more than the 30-day norm, Thomson Reuters data showed.	
	
	
 (Reporting by Rene Pastor; Editing by John Picinich)	
 

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