Cotton futures settled higher in choppy trade on Friday as trade and speculative buying boosted values although option-related sales kept prices from breaching their session highs, market sources said.
"The market was stuck on either side of 48 cents because of September options expiration. There was extremely good trade buying of futures at the lower levels and selling through the option ring at the higher levels, so the trade has been on both ends of the market today," said Mike Stevens of Swiss Financial Services of Mandeville, Louisiana.
The New York Board of Trade's December cotton contract finished the day up 0.52 cent to 48.56 cents a lb, ranging from 47.76 to 48.60 cents.
March ended 0.52 cent higher as well at 50.59 cents and the rest closed 0.17 to 0.47 cent firmer.
"What's interesting is that we made a new low by 0.04 cent today from Monday's low at 47.80 and we didn't go anywhere, so to me, this market looks lousy, technically," said one cotton trader.
The market followed its opening call of up 0.20 cent on good trade buying and some speculative short covering following Thursday's sell-off.
"The market action was so poor yesterday because it had every right and every reason to trade higher with those fantastic export sales figures and it failed so miserably that until we can close back up above 49.25, the path of least resistance is going to continue down," said Stevens.
On Thursday, the US Department of Agriculture's weekly export sales data showed US cotton sales at 459,500 running bales (RBs, 500-lbs each) and US cotton shipments of previously booked orders amounting to 443,700 RBs.
Brokers Flanagan Trading Corp sees resistance in the December contract at 48.65 and 49.10 cents, with support at 48.00 and 47.25 cents.
Floor dealers estimated final futures volume at 8,500 lots versus 6,979 lots on Thursday. Open interest increased 126 lots to 102,742 lots as of August 18.
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