Cotton futures finished marginally higher Monday on trade buying in lethargic business, with brokers saying the market will likely stay in a band this week with the New Year holidays coming up. The New York Board of Trade's March cotton contract rose 0.02 cent to close Monday at 42.92 cents a lb, moving from 42.17 to 42.95 cents. May lost 0.09 cent to 43.40 cents. Two contracts aside, the rest gained 0.10 cent.
Mike Stevens of SFS Futures in Mandeville, Louisiana, said fiber contracts appear to show little, if any, inclination to move sharply in the days ahead with the year-end holidays.
The cotton market was shut last Friday for Christmas and trading will be suspended again on Friday, December 31, in observance of New Year, which falls on Saturday.
Fundamentally, cotton players are wrestling with record crops in both the US and places like China although solid consumer buying has supported New York futures every time it tried to explore lower levels, analysts said.
Stevens said speculative and fund accounts were selling cotton "right off the bat," but the trade provided support for the market at the lows and led it back.
"Trade stepped up to the plate," he said, adding small speculators covered their positions when they saw prices were not going to go any lower.
But with many players already peeling away for the holidays, dealers feel cotton will stay in a band in the days ahead, although some feel the thin conditions could lead to sharp gyrations in the price of contracts.
"The market should be quiet, but we could see sharp moves precisely because it is so thin. You could move this market on a 50-lot transaction," a trading house analyst said.
Brokers Flanagan Trading Corp forecast resistance in the March cotton contract at 43.40 cents and 44 cents, with support at 42.85 cents and 42.10 cents.
Floor dealers said estimated final volume stood at 7,500 lots, versus Thursday's 3,483 lots. Open interest in the cotton market rose 543 lots to 84,542 lots as of December 23.
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