New York cotton at nine-month high

Cotton futures settled Friday close to a 9-month high on sustained speculative buying as the overall bullish mood in commodity markets is seen keeping fibre contracts buoyant, analysts said. The New York Board of Trade's key May contract gained 1.00 cent to close at 53.65 cents a lb, moving from 52.15 cents to 53.80 cents. It was the best close for the contract since concluding at 54.32 cents on June 15, 2004.
July climbed 0.99 to 54.91 cents. Back months increased 0.20 cent to 1.05 cents.
"It's just continuous spec buying," said Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida. "We're looking for 60 cents next month."
Weathersby and other analysts said the fundamentally steady drumbeat of demand for cotton and the insatiable appetite of funds to keep gobbling up commodity products has prevented cotton futures from correcting its advance by pulling back.
"The next level you are looking at is 55 and then 60 cents. The specs have shown no sign of backing off even though cotton is looking increasingly vulnerable to a setback. Since the specs are still piling in, the locals are also there," a broker explained.
Aside from speculative accounts, dealers said trade buying has likewise given the market a boost, although some trade accounts were selling futures at the top of the range, the brokers said.
The market took note of news of rising concern by US officials regarding a significant increase in clothing imports from China and that they will consider imposing restrictions if the US market is being disrupted.
Analysts said the longer-term impact may be bearish since the Chinese are now one of the biggest importers of US cotton. "If they block imports, then it becomes a problem," one said.
Brokers Flanagan Trading Corp said resistance in the May contract was at 54 cents and 54.50 cents, with support at 53.20 cents and 52.50 cents.
Floor traders said final volume hit about 13,500 contracts, from the previous 18,316 lots. Open interest in the cotton market went up 2,901 contracts to 119,938 lots as of March 10.