Cotton futures finished on Friday at a 15-week high on steady all-around buying and should remain strong amid talk China will be a heavy of cotton in the months through the summer, analysts said. The New York Board of Trade's open-outcry July cotton contract increased 0.92 cent to end at 54.92 cents per lb, moving from 54.05 to 55.10 cents.
It was the highest close for cotton since trading above 55 cents in early March. The new-crop December cotton contract rose 0.67 to 59.68 cents. The rest gained from 0.20 to 0.82 cent.
IntercontinentalExchange's NYBOT electronic cotton market showed the July contract up 0.78 cent to 54.78 cents at 2:30 pm EDT (1830 GMT). "It is extremely overbought, but it is not sitting back," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
He and other brokers said talk that China may need to import several million (480-lb) bales of cotton and a surge in the average world price (AWP) of cotton has provided the fuel for the sustained surge in cotton.
Given the ideas that China will be a sizeable buyer of cotton, Stevens believes cotton futures will run into "extremely good support on any and all corrections" to lower ground in the pit.
Traders said the market also got a boost from surging corn and soybeans futures in Chicago. The market also saw some switch trade as players moved positions out of the spot contract before deliveries are posted on June 25. Open interest in the July contract fell 12,383 lots to 42,270 lots as of June 14 while interest in the December contract increased 9,528 to 141,143 lots.
Brokers Flanagan Trading Corp sees resistance in the July contract at 55.15 and 56.20 cents, with support at 54.60 and 53.95 cents. Floor dealers said final estimated open-outcry volume stood at 26,000 lots, from the prior volume of 36,542 lots. Screen trade Thursday was at 33,372 lots, NYBOT said. Open interest was at 221,733 lots as of June 14, down 1,745 lots from the previous session.
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