NEW YORK, April 26: Cotton futures closed lower on Friday due to late investor sales and in line with weaker soybean prices in Chicago, with brokers saying market direction will depend on what happens in the grains complex next week.

The ICE Futures’ July cotton contract fell 0.69 cent to close at 71.44 cents per lb, trading from 71.25 to 73.60 cents.

The new-crop December cotton futures eased 0.53 to 80.04 cents, dealing from 79.70 to 82.12 cents.

Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida, said cotton futures are still being led by the grains.

He said investors next week would want to see what happens to the rest of the cotton deliveries in the May contract and what kind of action takes place in grains trading.

Cotton market players have been closely watching the grains market because of the way sharp increases and sell-offs in goods like corn, soybeans and wheat have impacted the amount planted to fiber contracts.

Analysts said a strengthening in the dollar into next week would put further pressure on cotton along with any liquidation by investors who had built up positions in the market.

The easiest path for this market is still down, but you get pretty good trade fixation type buying at the lows in this thing, one explained.

Looking forward, the market may soon be turning its attention to the US Agriculture Department’s monthly supply/demand report in May which will contain the first estimate for the 2008/09 marketing year (August/July).

A daily commentary by brokers Flanagan Trading Corp said cotton would track grains, but that may be delayed until after the USDA data.

It will be interesting to see whether the USDA expects China and India to cut back on cotton in favour of food and feed.

Flanagan Trading sees resistance in the July cotton contract at 72.50 and 73.35 cents, with support at 71.25 and 70.60 cents.

Total volume traded in the cotton market Thursday was at 18,593 lots, with open interest in the market down 1,381 lots to 250,451 contracts as of April

24, exchange data showed.

—Reuters