Cotton futures settled higher on Monday as the market gyrated in a band, with players watching the movement of the dollar to determine the next move of the market, brokers said. The December cotton contract rose 0.03 cent to end at 67.41 cents per lb, dealing from 66.66 to 68.59 cents. December contract volume reached 10,209 lots at 2:45 pm EDT (1845 GMT).
March cotton added 0.14 cent to settle at 70.01 cents, trading between 69.24 and 71.07 cents. Investment funds are taking all their cues from the movement of the dollar, said Frank Weathersby, analyst for brokers Affinity Trading in Fort Walton Beach, Florida.
The market surged earlier in the session, faltered at the top and then pared its losses going into the close, analysts said. Most of the leads in the market came from investors who would lighten or load up on positions depending on the way the dollar is behaving, they said. Investors continued to increase their long positions in cotton with open interest in fiber contracts standing at 181,864 lots as of October 22.
The amount of open interest in cotton has expanded by more than 40 percent during the past three weeks as investors put money down on the market. Some analysts believe market fundamentals do not reflect the strength of cotton futures. They point to the ongoing US cotton harvest and weak demand in cotton as can be gleaned from a series of weak cotton export sales by the US Agriculture Department.
Brokers Flanagan Trading Corp sees resistance in the December contract at 67.50 and 68.40 cents, with support at 66.65 and 65.65 cents. Total cotton volume traded Friday hit 16,419 lots, from the prior tally of 11,570 lots, ICE Futures US said. Open interest in cotton stood at 181,864 lots as of October 23, from the prior count of 180,635 lots, the exchange said.
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