New York cotton slightly higher

Cotton futures ended slightly higher Thursday on combined options-related and commercial buying as players looked ahead toward a government production report being released tomorrow, dealers said.
The New York Board of Trade's May cotton contract rose 0.31 cent to settle at 54.17 cents a lb, in a band from 54.02 to 54.71 cents. July added 0.21 to 55.37 cents. The rest rose 0.05 to 0.52 cent.
"It's a pre-report market," said Jobe Moss, an analyst for brokers and merchants MCM Inc in Lubbock, Texas.
He was referring to the US Department of Agriculture's monthly supply/demand report being handed out at 8:30 am EST (1330 GMT) on Friday. Analysts expect only minor changes in the USDA data, with most of the attention on the estimates for China.
"The only suspense I know is going to be world consumption, and specifically Chinese consumption," said Mike Stevens, an analyst for SFS Futures in Mandeville, Louisiana.
In February, USDA pegged world cotton consumption in 2005/06 at 116.79 million (480-lb) bales, from the January estimate of 115.24 million. Chinese cotton use rose to 45 million bales from 43 million.
Traders said an early burst of buying from the options ring combined with likely export-linked purchases to power cotton to its highs for the day.
But the market could go no higher and late sales by commodity funds dragged cotton futures down to support near 54 cents, basis the key May contract, they said.
There was little reaction in the pit to the weekly USDA export sales report. USDA said total US cotton sales hit 334,000 running bales (RBs, 500-lbs each), from sales last week of 241,600 RBs.
US cotton shipments of previously booked orders amounted to 444,000 RBs, versus last week's 452,900 RBs.
Brokers Flanagan Trading Corp sees resistance in the May cotton contract at 54.70 and 55.10 cents, with support at 54.10 and 53.80 cents. Floor dealers said final trading volume was estimated at 15,000 lots, up from Tuesday's count of 12,215 lots. Open interest fell 868 lots to 122,691 contracts as of March 8.