By Julie Wernau
Cotton prices dropped on light trading volume on Friday, after a major trade publisher upwardly revised its estimate of world cotton supplies for the season.
Cotton for March delivery fell 0.5% to end at 71.25 cents a pound on the ICE Futures U.S. exchange.
U.K.-based Cotlook Ltd. on Friday said it expects ending stocks of cotton in 2016/2017 to contract by 1.58 million tons compared to its October estimate of 1.8 million tons.
"With December fixations out of the way, the market seems to be ready for a pullback," Plexus Cotton Ltd. said in a note, adding that a move to 68 or 69 cents could present a buying opportunity.
The revision, Cotlook said, comes from boosts in production in the U.S. and Africa as well as lower global consumption from Vietnam and other smaller markets.
Helping keep support under cotton were higher-than-expected family home sales in October, said the Hightower Report in Chicago. The U.S. had the strongest sales pace since February 2007, leading some long-positioned traders to hold fast to those positions on the belief that more buying of home goods could boost cotton sales.
At the same time, China, which holds most of the world's stocks of cotton, has ceased its sales auctions for the season. Sales aren't expected to begin again until March.
In other markets, raw sugar for March rose 1.3% to settle at 19.84 cents a pound, cocoa for March was down 1% to close at $2,415 a ton, arabica coffee for March lost 1.5% to $1.554 a pound and January frozen concentrated orange juice futures rose 2% to settle at $2.1645 a pound.
Write to Julie Wernau at firstname.lastname@example.org
(END) Dow Jones Newswires
November 25, 2016 15:10 ET (20:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.