Cotton futures finished higher Friday on investor buying as the market stabilised after falling to a 14-month low the previous session, analysts said. The key December cotton contract on ICE Futures US rose 0.24 cent to close at 97.10 cents per lb, dealing from 96.47 to 98.80 cents. The market is down 4.7 percent for the week.
On Thursday, the contract fell by almost 3 percent to end at 96.86 cents in the lowest settlement for the spot contract since September 2010. It was also the first time in almost four weeks that the market broke a trading band that had confined December in a range from 98 cents to $1.04.
Total volume traded Friday was more than 12,800 lots, some 5 percent under the 30-day norm, preliminary Thomson Reuters data showed. The market is cautiously looking at a possible resolution to the eurozone debt crisis next week, but players are worried that demand from top consumer China will remain weak and the pace of US cotton exports will stay slow. "I think the market has a real tough time getting back over a $1 (per lb)," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.
He said it is now more likely that cotton prices, basis December, will have a new trading band running from about 93 to 98 cents. Open interest in cotton, usually taken as an indicator of investor exposure in cotton, stood at 156,328 lots as of October 20, from 152,825 lots on October 19, the exchange said. Open interest is the highest since early June. Total volume traded Thursday in the cotton market reached 22,529 lots, against the prior tally of 15,343 lots, ICE futures US data showed.
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