Cotton Falls From 30-Month High On Speculative Selling
August 30, 2010 By Debarati Roy
Bloomberg
Cotton prices dropped from a 30- month high in New York amid signs of speculative selling.
The second-biggest bet for cotton-options trading is for prices to fall to 75 cents by December, according to data compiled by Bloomberg. Late last week, cotton rose to 87.3 cents a pound, the highest level since March 6, 2008, on concern that global supplies continue to lag behind demand.
“Option-related selling took prices into new lows for the day,” said Mike Stevens, an independent trader in Mandeville, Louisiana. “The fundamental story remains intact.”
Cotton for December delivery fell 0.08 cent, or 0.1 percent, to settle at 86.07 cents at 2:33 p.m. on ICE Futures U.S. in New York. The fiber climbed 3 percent this week and has advanced 49 percent in the past year on forecasts for use to exceed production.
Consumption will increase to 25.715 million metric tons from 24.934 million a year earlier, the Birkenhead, England- based researcher said today in an e-mailed report.
China, the world’s biggest consumer, sold all 14,143 metric tons of cotton offered today from state reserves at an auction, the nation’s cotton association said in a statement, a sign of rising domestic demand.
(Story found in original format here.)
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