NYCE cotton futures finished higher Tuesday, with spread activity the main feature amid some speculative buying, traders said.
"The market had a friendly slant to it today. Guys were buying the spread, along with some outright speculative buying," said one floor trader.
March gained 0.85 cent to settle at 67.20 cents a lb, after moving from 66.40 to 67.25 cents. May rose 0.83 cent to 69.01 cents. Back-month contracts ended mixed, from down 0.07 cent to up 0.81 cent.
The March/May spread continued to be featured ahead of first notice day in the March future on February 23.
"We're getting ready for March delivery, so I think a lot of today's action was rolling out of the front month on into later month positions," said one trader.
One dealer also noted that a sharply lower US dollar may have helped the day's advance.
"We made new 8-year lows on the US dollar this morning, which should be friendly to the cotton market long term, as buyers would look to purchase a cheaper cotton than in other world markets," he explained.
Looking forward, the market will digest two reports this week. Wednesday's spec/hedge report and the US Department of Agriculture's export sales report on Friday.
Brokers Flanagan Trading Corp said the spec/hedge report should show that specs have started to build a net short position for the first time since last summer.
"We think cotton futures are vulnerable to a sharp setback this week, unless export sales are sufficient to match fund selling," Flanagan said in a daily market comment.
Technical analysts said resistance in the March contract was seen at 66.90 cents and 67.50 cents, while support was placed at 66 cents and 65.25 cents.
Floor dealers said estimated final volume reached about 16,971 lots, versus Friday's official tally of 10,458 lots.
Open interest eased 462 lots to 80,331 lots as of Friday.
Comments
Comments are closed.