New York cotton settles higher

Cotton futures ended higher Thursday on combined trade and speculative buying as the market kept be grinding its way higher on the back of robust demand for the fibre, analysts said.
The New York Board of Trade's May cotton contract rose 0.54 cent to finish at 53.70 cents a lb, dealing from 53.35 to 53.90 cents. July added 0.61 to 55.35 cents and the rest went up 0.24 to 0.45 cent.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said demand has underpinned strength in futures and a further surge is possible if cotton prices march higher.
The US Department of Agriculture's weekly export sales report showed US net upland cotton sales at a marketing year high of 470,500 running bales (RBs, 500-lbs each). Total sales stood at a whopping 539,100 RBs, versus trade belief it would range from 300,000 to 400,000 RBs.
US cotton shipments of previously booked orders reached 487,600 RBs, up sharply from last week's 387,800 RBs.
"It shows the market doesn't have to go much lower to uncover tremendous demand," said Stevens. "All you need is a technical trigger (to move higher)." He added the close above 53.60 cents in May meant the market would probably go higher.
On another front, cotton analysts said they will be looking next at the USDA's annual potential plantings report due out on Friday for the next move of the market.
A survey of analysts by Reuters showed US cotton sowings reaching an average of 14.44 million to 14.45 million acres in 2006/07, up from the 14.195 million acres planted last season.
"Most everybody is betting on a higher number but it does not seem it will be a strong factor in this market since the focus is on demand," a dealer said.
Another factor featured in the market is switch business since there are only a little over two weeks left before deliveries commence in the May contract. Open interest in the May contract fell 991 contracts to 87,342 lots as of March 29.
Brokers Flanagan Trading Corp sees resistance in the May cotton contract at 53.80 and 54.10 cents, with support at 53.30 and 52.75 cents.
Floor dealers said final trading volume was estimated at 18,000 lots, up from Wednesday's count of 15,592 contracts. Open interest fell 102 lots to 136,128 contracts as of March 29.