Cotton futures rebounded to end higher Tuesday on trade buying, with most of the trade uncertain about the market's direction over the next few sessions, brokers said.
The New York Board of Trade's benchmark May contract climbed 0.42 cent to close at 55.44 cents a lb, dealing from 55.10 to 55.70 cents. It was an inside day as the range held within Monday's 55 to 56.15 band. July rose 0.41 to 56.67 cents. Except for one contract, the rest gained 0.13 to 0.55 cent.
"The trade stepped up," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, adding the ability of the trade to nudge the market higher may be seen as "constructive."
But she added it was hard to tell which way the market was headed over the next few days and players would spend the following sessions making up their minds.
Fundamentally, the market will be looking toward release of the weekly export sales report from the US Department of Agriculture on Thursday.
They will also be monitoring conditions in Texas, the top cotton growing state in the country, to see if a damaging dry spell will affect plantings in the state.
For today, cotton futures edged up from the opening bell and gradually worked its way to the top of the range going into the close of business, dealers said.
"The attempt to push it down stopped in front of 55 (cents, basis May) so you have to believe there's a bunch of trade support there that is preventing it from falling out of bed," one explained.
The daily commentary of Memphis, Tennessee-based brokers iamhedged.com's Alan Feild said there's abundant trade buying and export business at the lower levels of the market.
Brokers Flanagan Trading Corp put resistance in the May cotton contract at 55.75 and 56.30 cents, with support at 55.10 and 54.70 cents. Floor dealers said final trading volume was estimated at 14,000 lots, down from Monday's count of 27,431 lots. Open interest slumped 2,661 lots to 121,853 contracts as of February 27.
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