Cotton futures closed higher Friday on fund buying and end-of-month speculative short-covering, with the steady tone seen spilling over into trading early next week, brokers said.
The New York Board of Trade's July cotton contract gained 0.97 cent to conclude at 51.72 cents a lb, moving from 50.50 to 51.75 cents. New-crop December rose 0.84 to 55.85 cents. The rest added 0.60 to 1.10 cents.
"I think a lot of them (investors) are cleaning up for the end of the month (booksquaring)," said Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida. He said cotton received support from trade fixation style buying which enabled the market to push up near its highs for the session.
"It's the last day of the month which is significant to commodity funds. They've had a profitable April, so it's possible they could buy back contracts on the close to close out the profitable April," said a report by Alan Feild of brokers iamhedged.com in Memphis, Tennessee. Fundamentally, the market will continue keeping tabs on demand and growing conditions across the US cotton belt.
"Although weather conditions are not ideal, nor are they so problematic at this time to warrant any serious fears with US (cotton) production yet," a report by Sharon Johnson, cotton expert for First Capitol Group, said.
Analysts said the market may continue to trade near 50-51 cents, basis July, although robust demand will keep any losses from speculators at a minimum.
"New York (cotton futures) will continue to struggle to hold above the current level and some volatile days will continue to surface. Yet, roaring demand should support the market and allow prices to climb 2.0 to 3.0 cents," the weekly commentary analyst O.A. Cleveland explained.
Brokers Flanagan Trading Corp put support in the July cotton contract at 51.60 and 50.80 cents, with resistance at 52.15 and 53.15 cents. Floor dealers said final trading volume was estimated at 16,000 lots, up from Thursday's tally of 12,078 lots. Open interest rose 1,483 lots to 146,356 contracts as of April 27.
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