Cotton futures finished higher Wednesday on modest fund buying as most players awaited the release of a vital potential plantings report by the US Agriculture Department this week, brokers said.
New York Board of Trade's May cotton contract climbed 0.52 cent to end at 53.91 cents per lb, trading from 53.39 to 53.95 cents. July rose 0.46 to 54.87 cents. One contract aside, the rest increased from 0.15 to 0.50 cent.
The IntercontinentalExchange's NYBOT electronic market for cotton showed the May contract up 0.53 cent at 53.92 cents at 2:33 pm EDT (1833 GMT), moving from 53.35 to 53.95 cents.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said fund buying seeped into the pit and nudged fibre contracts higher. She said investment funds apparently have a "friendly bias" for cotton futures which they believe "seems poised to breakout to the upside." The trade though was already awaiting release of the USDA's annual potential plantings report on Friday at 8:30 am EDT (1230 GMT).
A survey of cotton industry analysts by Reuters showed they believe US 2007 cotton plantings will reach an average of 12.217 million acres, down 20.02 percent from 2006 cotton sowings of 15.276 million acres. The pace of cotton sowings by American cotton farmers are seen taking a hit from the robust rally in corn futures which recently surged to a 10-year high.
Separately, cotton brokers said the USDA's weekly export sales report should show total US cotton sales ranging from 200,000 to 300,000 running bales (RBs, 500-lbs each), from 314,300 RBs in last week's report. One analyst feels sales could even hit 350,000 RBs. US cotton shipments of previously booked orders are seen ranging from 200,000 to 250,000 RBs, against last week's 241,400 RBs.
Brokers Flanagan Trading Corp sees resistance in May cotton at 54.35 and 54.90 cents, with support at 53.75 and 53.30 cents. Floor dealers said estimated final volume stood at 15,000 lots, from the prior open-outcry volume of 10,268 contracts. NYBOT said electronic trading volume Tuesday was at 6,674 lots. Open interest in the cotton market rose 3,183 lots to 224,796 lots as of March 27.
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