Cotton prices settled higher on Thursday, as investors covered their short positions in anticipation of the US weekly export sales data expected to release on May 31. The most active cotton contract on ICE Futures US, the July contract, settled up 0.29 cent, or 0.42%, at 69.35 cents per lb.
It traded within a range of 68.18 and 69.5 cents a lb.
"Cotton is a little higher today as we await (Friday's) delayed sales and export numbers," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia, adding that a comeback in corn and wheat have also helped support prices.
"We may see additional short-covering buying by speculators, and if sales and export numbers are friendly, that will also be supportive."
Corn futures were higher on Thursday following some weakness on Wednesday as planting stood at a historic slow pace in the Midwest.
However, analysts are wary about the outlook for cotton amidst a long-standing trade dispute between China and the United States, and delayed planting.
"Most fundamentals for cotton are bearish - the dollar is strong and we do not have a trade deal with China," Brown said.
The dollar gained on Thursday as the trade stand-off between China and the United States prompted traders to put money into perceived safe currencies including the greenback.
Signs that the trade dispute will not be resolved quickly and concerns over its impact on global growth have roiled markets since its conception.
Total futures market volume fell by 2,897 to 21,225 lots. Data showed total open interest gained 1,118 to 216,933 contracts in the previous session.
Certificated cotton stocks deliverable as of May 29 totalled 82,882 480-lb bales, up from 82,163 in the previous session.
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