Cotton futures eased on Thursday in heavy trading

Cotton futures eased on Thursday in heavy trading, receding from the 6-month highs, beleaguered from the rolling of closely-watched commodities index funds. Volumes were heavy throughout the session as traders moved positions from the March contract into May.

The most-active May cotton contract on ICE Futures U.S. edged down 0.27 cent, or 0.3 percent, to settle at 88.58 cents a lb.
The spot March contract fell more sharply, finishing down 0.77 cent, or 0.9 percent, at 87.60 cents a lb.

Sharon Johnson, a cotton specialist with KCG Futures in Atlanta, of the day’s heavy selling said there wasn’t anyone to offset the index fund activity.

The pressure in the spot month pushed its discount to 0.98 cents a lb below the second-month, from 0.48 cent a lb previously to its biggest discount since December.

Weekly U.S. Department of Agriculture export data showed that sales of upland cotton fell 33 percent from the previous week to 120,300 running bales and included cancellations from buyers in top consumer China.

Even as high prices have dented demand, the data showed shipment levels were strong and the world’s top exporter remained poised to outpace the USDA’s export forecast for the 2013/14 crop year that ends July 31.

Courtesy: Reuters

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