New York cotton futures touch higher

Cotton futures closed with small gains Tuesday on buying by small speculators in subdued dealings, and the lack of news may keep the market confined to a trading band for now, dealers said.
New York Board of Trade May cotton closed off 0.14 cent at 54.10 cents a lb after trading 54.02 to 54.78 cents. July lost the same to 55.33 cents. One contract aside, the rest shed 0.05 to 0.25 cent. "It's directionless trade," said Mike Stevens, an analyst for SFS Futures in Mandeville, Louisiana.
Fundamentally, the market is monitoring the start of spring plantings in the United States and the pace of demand for cotton in the last few weeks of the 2005/06 marketing year, which ends in July.
The market edged to what would be its session highs after the start of trade, but the absence of any sustained buying prompted small speculators to steadily sell going into the close of business, dealers said. Attempts by these speculators to push the key May contract below the key level of 54 cents were unsuccessful after trade buying again showed up at that level, they said.
"The trade has been a steady presence near 54 (cents). If the specs cannot push it down so we can hit (automatic sell order) stops, it should come back easily," one dealer explained.
Analysts said cotton could thrash around its current band until the release by the US Department of Agriculture of its annual planting intentions report on March 31.
A report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta, said "a re-test of the lows of last week may have to occur in order for another rally to get underway."
She concluded, "It is possible the nearby futures may have to work down to 52.50 to 53 (cents, basis May) though the odds are low in my mind for a break of this size before turning back up. We should know by close of business on Wednesday."
Brokers Flanagan Trading Corp put resistance in the May cotton contract at 54.70 and 55.10 cents, with support at 53.80 cents.
Floor dealers said final trading volume was estimated at 10,000 lots, down from Monday's count of 13,070 lots. Open interest rose 1,189 lots to 125,110 contracts as of March 13.