NYBOT cotton extended its rally to close higher Wednesday on trade and merchant buying, with the market possibly challenging technical obstacles in the days ahead, analysts said.
Key December cotton climbed 0.96 cent to finish at 49.09 cents a lb, ranging from 48.20 to 49.60 cents. March jumped 1.05 cents to 50.89 cents. The rest of the board gained 0.70 to 1.20 cents.
"I think there is a little shift in the psychology of this market," said Keith Brown, president of commodity trading firm Keith Brown and Co. in Moultrie, Georgia. He added December cotton may mount a probe just above 50 cents in the coming sessions.
Most market participants have been bearish on cotton as they pointed to a record crop in the US and large crops in places like China, the world's largest producer and consumer of the fibre.
But Brown said the focus in the cotton trade seems to be turning toward demand amid rising belief that consumer buying could help absorb the huge crops being harvested this season.
Alan Feild, an analyst for brokers iamhedged.com in Memphis, Tennessee, said some of the speculative buying was trying to push December delivery into an area around 50.30 cents where automatic buy orders may be triggered.
Looking toward the US Department of Agriculture's weekly export sales report, cotton brokers said US net upland cotton sales are seen reaching between 50,000 and 100,000 running bales (RBs, 500-lbs each), versus sales in last week's data of 37.800 RBs.
US cotton shipments of previously booked orders are seen ranging from 50,000 to 100,000 RBs, against shipments of 60,700 RBs last week.
Brokers Flanagan Trading Corp. put resistance in December cotton at 49.90 and 50.50 cents with support at 49 and 48.30 cents.
Floor dealers estimated final volume at 8,500 lots, up from Tuesday's tally of 5,658 lots. Open interest fell 58 lots to 70,745 lots as of September 21.
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