Cotton futures settled higher on Monday on investor short-covering and trade buying as the market rebounded after sinking to a 6-week low last week, brokers said. The July cotton contract climbed 0.56 cent to close at 55.67 cents per lb.
On Friday, the contract ended at 55.11 cents a lb in its lowest since the week ending April 26. Trading from 54.26 to 55.86 cents. Volume traded in the July contract was at 11,328 lots at 2:40 pm EDT (1840 GMT). The new-crop December cotton contract increased 0.67 cent to conclude at 60.24 cents.
"We found good support at today's low and business (was being done)," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia. Analysts said early weakness in fiber contracts stemmed from the firm dollar, but the market's ability to hold its lows for the session combined with mill fixation purchases to stabilise cotton.
The trade will turn its attention to the release on Wednesday at 8:30 am of the US Agriculture Department's monthly supply/ demand report. Most of the trade expect no major changes when the USDA hands out its report, with analysts saying any projection on US cotton demand would be affected by the USDA's annual planted acreage report being released on June 30.
Brokers Flanagan Trading Corp sees support in the July cotton contract at 55.50 and 54.65 cents, with resistance pegged at 56.75 and 57.85 cents. Total volume traded Friday reached 23,074 lots, versus the previous tally of 14,396 contracts, exchange data showed. Open interest in the cotton market was at 133,275 lots as of June 5, from the previous count of 134,642, ICE Futures US said.
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