New York cotton near highs

Cotton futures settled near session highs Friday on mixed trade and speculative buying as the uncertain storm track of hurricane Katrina kept the sellers at bay, brokers said. The New York Board of Trade's December cotton contract gained 0.35 cent to finish the day at 48.46 cents a lb, after dealing in a tight 48.15 to 48.50 cent range.
March rose 0.21 cent at 50.30 cents, while back month contracts closed mixed, from unchanged to up 0.23 cent.
Cotton futures followed their opening calls of 0.20 cent higher on the lack of follow-through selling and trade and speculative buying that nudged prices back up to the middle of Thursday's 48.75-48.10 cent range, brokers said.
"The market will remain below 50 cents for now, but with a bias to move higher. Demand is thriving, but being very early in the season, traders continue to focus their attention to crop production prospects both in the US and around the globe. The market is on the edge of expectations that would take both the US and the foreign crops lower than that carried in USDA's August report. The initial move above 50 cents will signal the market's anticipation and should propel prices back to the mid 50's," wrote O.A. Cleveland in a weekly market comment.
Fundamentally, the trade was very cautious to be on the sell-side of the market today due to the uncertainty of hurricane Katrina's projected path.
The US National Hurricane Center forecast Friday more strengthening during the next 24 hours with Katrina possibly becoming a Category 3 storm by Saturday.
The storm was moving west-south-west at nearly 8 mph with a gradual turn toward the west expected later Friday night or Saturday and may start to curve north early Saturday and strike the Florida panhandle on Monday.
Mike Stevens of SFS Futures in Mandeville, Louisiana, said a more westerly storm track could threaten Mississippi, Louisiana and Arkansas where as much as 20 to 30 percent of the crop is open.
Brokers Flanagan Trading Corp pegged resistance in the December contract at 48.65 and 49.10 cents, while support was seen at 48.00 and 47.25 cents.
Estimated final cotton futures volume was said to be about 4,000 lots, against 6,179 lots recorded on Thursday. Open interest increased 323 lots to 104,745 lots as of August 25.