New York cotton futures close higher

Cotton futures closed higher on Monday due to steady fusillade of speculative buying as the market shrugged off a government report and got a boost from surging grains prices, brokers said.
The New York Board of Trade's open-outcry July cotton contract gained 0.50 cent to end at 51.92 cents per lb, dealing between 51.65 and 52.19 cents. The new-crop December cotton contract rose 0.59 to 57.74 cents. Back months went up from 0.30 to 0.75 cent.
IntercontinentalExchange's NYBOT electronic cotton market showed the July contract up 0.53 cent to 51.95 cents at 2:34 pm EDT (1834 GMT). Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said fibre contracts basically ignored the US Agriculture Department's monthly supply/demand report and concentrated on the fact that high grains prices may siphon more acres from farmers here who used to sow cotton.
"The perception is better days are coming," he said, adding there is a growing view "that a global shift away from cotton" may be kicking off due to rallying grains prices. Traders said the market may also be fretting about growing weather conditions in the US cotton belt and they will gain some leads when the USDA hands out its weekly crop progress report later on Monday.
They said the USDA's monthly supply/demand data was neutral for cotton futures. USDA forecast US cotton output in 2007/08 unchanged at 18.8 million (480-lb) bales. World consumption was raised slightly to 127.41 million bales from 127 million last month and production was trimmed to 115.89 million versus 116 million bales.
Futures started higher and proceeded to grind up throughout the session. Brown said cotton should hold steady to slightly higher in the days ahead. Broker Flanagan Trading Corp sees resistance in the July contract at 52.25 and 53.05 cents, with support at 51.60 and 50.90 cents.
Floor dealers said final estimated open-outcry volume stood at 20,000 lots, from the prior volume of 22,145 lots. Screen trade Friday was at 19,939 lots, NYBOT said. Open interest was at 215,522 lots as of June 8, down 575 lots from the previous session.