Cotton futures finished firmer Tuesday on speculative short-covering and options-linked buying, but analysts were uncertain whether the market may again resume its fall in the days ahead, brokers said. New York Board of Trade's open-outcry July cotton contract rose 0.83 cent to finish at 47.75 cents per lb, trading between 47.10 and 47.90 cents.
New-crop December added 0.61 cent to 52.30 cents and the rest rose 0.20 to 0.75 cent. IntercontinentalExchange's NYBOT electronic platform for cotton showed the July contract up 0.83 cent at 47.75 cents at 2:27 pm EDT (1834 GMT). Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said the move to higher ground might have been "a reaction to being oversold." She said market players will wait to see if the market can stabilise or whether fibre contracts would fall further in the coming sessions.
The market is still mulling how much cotton merchants will redeem from government warehouses especially if the AWP (average world cotton price) rises next week. On a fundamental level, the market digested news from the US Agriculture Department's weekly crop progress report which showed 46 percent of US cotton sown, below 51 percent at this time last year and the five-year average of 51 percent.
"Georgia and Alabama lag in planting progress due to the extreme dry conditions there, while Texas lags due to wet and cool conditions," said a daily commentary by brokers Flanagan Trading Corp.
Texas is the top cotton growing state in the country. USDA said cotton plantings there stand at 27 percent versus the five-year average of 36 percent. Flanagan Trading sees support in the July contract at 47.30 and 46.60 cents, with resistance at 48.10 and 48.70 cents. Floor dealers said estimated final volume stood at 8,200 lots, from the prior total volume of 13,838 contracts. Open interest was at 225,159 lots as of May 11, down 611 lots from the previous session.
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