Cotton futures settled higher on Thursday on investor buying and short-covering as the market was given a boost by possible losses in the cotton crop in southern Texas from hurricane Dolly, brokers said. The key December cotton contract gained 0.94 cent to finished at 73.86 cents per lb, dealing from 70.78 to 73.70 cents.
"To get it extended, you need to get it over 75.30 (cents, basis December)," said Stevens. Stevens said the damage inflicted by hurricane Dolly on the 92,000 acres of cotton in the Rio Grande Valley may have given the market a boost as well.
The cotton from that area is important because it is the first cotton in the new crop 2008/09 marketing year (August/July) and some of that fibre may have already been contracted for sale, he added. The amount probably lost is small since Texas was forecast to plant 4.7 million acres to cotton in 2008/09. The state is the leading cotton grower in the country.
Market players took note of the US Agriculture Department's weekly export sales data. USDA said US cotton sales stood at 151,000 running bales (RBs, 500-lbs each) and US cotton shipments of previously booked orders hit 258,000 RBs.
Brokers Flanagan Trading Corp sees support in the December contract at 73.60 and 72.50 cents, with resistance at 74.40 and 75.25 cents. Volume traded Wednesday hit 13,921 lots, exchange data showed. Open interest in the cotton market fell 837 lots to 217,729 lots as of July 23, exchange data showed.
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