NYCE cotton closed higher Friday on options-related, trade and speculative buying as fibre rebounded after falling yesterday to a nine-month low, analysts said.
July cotton settled up 0.76 cent at 57.80 cents a lb after trading from 57.30 to 58.70 cents. On Thursday it closed at 57.04 cents to mark the lowest finish for cotton on a spot basis since 56.75 cents in late August 2003.
December gained 0.21 to 57.51 cents and the distant months increased 0.05 to 0.50 cent.
Futures extended a recovery that began on Thursday as the buying triggered automatic buy orders once July hit 58 cents, according to Sharon Johnson, cotton expert at Frank Schneider and Co Inc in Atlanta.
Mike Stevens of Swiss Financial Services in Mandeville, Louisiana, said the market derived some strength from talk that stocks being held by a cotton house will likely be moved.
"The signs are there" that cotton may have finally found a floor shortly after falling to its recent lows, he said.
Analysts said trade buying supported fibre contracts at its session lows and then speculative buying emerged as the July contract hit its highs just short of the target of 59 cents.
The weekly USDA export sales report likewise provided some positive sentiment for futures.
USDA said combined US upland cotton sales hit 244,400 running bales (RBs, 500-lbs each), from 243,400 RBs in last week's report. Shipments hit 358,200 RBs, against trade belief it would run from 300,000 to 350,000 RBs.
Brokers Flanagan Trading Corp said the sales were broad-based and not to China alone, which should be encouraging for the market.
Flanagan pegged support in the July contract at 57.35 and 56.65 cents with resistance at 58.10 and 59.30 cents.
Floor dealers said estimated final volume was 9,500 lots, down from Thursday's tally of 15,547 lots. Open interest rose 1,753 lots to 85,070 lots as of June 3.
Comments
Comments are closed.