New York cotton slips
NEW YORK, Oct 20: The US cotton futures closed modestly lower on Thursday, retreating from five-month highs, as investors took some profit on a price surge caused by worries that the market may face a near-term squeeze in supply of good quality fibre.
Prices eased for the first time in five sessions, after running up on concerns that cotton from the early harvest of fields in the south-eastern. The US had high levels of “micronaire.” Such a condition could result in coarse fibres that could break during the spinning process at textile mills.
The most-actively traded cotton contract on ICE Futures the US, December, closed down 0.14 per cent, or 0.2 per cent, at 77.72 cents a lb. The contract fall from the daily limit of three cents a pound before recovering most of it.
“The way this market has rallied has caught too many people short,” said Jobe Moss of cotton traders MCM Inc in Lubbock, Texas.
“It’s only right that some profit-taking comes in, but there’s still a lot of upside pressure that’s keeping things up.” December cotton settled at a five-month high of 77.86 cents on Wednesday, after rallying nearly 8 per cent from Monday’s close.
Traders said the contract has potential to move up to May’s highs of above 80 cents a pound.—Reuters