According to Reuters, as mills continued to purchase small parcels of fiber, cotton futures increased this Tuesday. Holding in recent ranges, the benchmark December cotton contract on ICE Futures U.S. was up 0.4 percent at 68.18 cents a pound, reports the Wall Street Journal. Prices have recently been outperforming the broader grains market as they have been greatly affected by speculative selling in recent weeks, hitting a two-year high last week.
Exchange inventories dropped to 290,975 bales on Friday from 307,727 previously, falling further from July's one-year peak of over 462,000 bales.
When prices briefly struck a 9-day moving average of 67.93, traders interpreted it as a short-term resistance level. However, the gains didn't last long, as producer selling started. According to Reuters, Keith Brown, the principal at cotton brokers Keith Brown and Co in Moultrie, Georgia, a close above that level would have assisted the market in breaking free from a previous bearish trading range, and even helped it revisit the 70-cent mark.
"The trend of the market is down. Nobody wants to be a hero and try to pick a bottom down here," said Brown, according to the Business Recorder.
With rain in Texas and Georgia, two of the largest production states in the nation, traders are finding it difficult to see any bullish factors in the market, as farmers brace for a bumper yield.
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