Cotton futures closed higher on Thursday on speculative and fund short-covering as the rally in other commodity markets quickly reversed a short-lived downward correction in fibre contracts, brokers said. ICE Futures open-outcry December cotton contract rose 0.95 cent to end at 64.87 cents per lb, dealing from 64 to 64.95 cents.
March cotton gained 0.81 cent to 67.74 cents. The rest added from 0.84 to 1.16 cents. The ICE electronic cotton market showed the December contract 1.00 cent up at 64.92 cents at 3:17 pm EDT (1917 GMT), moving from 63.30 to 64.97 cents. "It's bull fever in the commodity markets," said Mike Stevens, an analyst of SFS Futures in Mandeville, Louisiana.
He said there was no fundamental reason behind the rally but that the buying spree which has jacked up gold, copper and grains prices has clearly spilled over into the cotton pit. Speculative fund buying again hoisted the market to higher ground, but the advance was stopped short of 65 cents, basis December, when scale-up trade sales capped the move, dealers said.
Cotton has posted strong gains on expectations by market players that US cotton acreage, which is already at an 18-year low this year of 11.01 million acres, would fall anew in 2008 due to sizzling rallies in grains prices which would spur US farmers to plant crops other than cotton.
The weekly export sales report also provided some positive backdrop for the market, the traders said. Total US cotton sales reached 198,900 running bales (RBs, 500-lbs each), higher than trade forecasts of 80,000 to 120,000 RBs and surpassing last week's sales of 113,700 RBs.
Open-outcry cotton volume Wednesday was 7,006 lots, while screen business reached 30,598 lots. Open interest in the cotton market rose 2,672 lots to 218,201 lots as of September 19. Broker Flanagan Trading Corp sees resistance in open-outcry December cotton at 65.60 and 66.25 cents, with support at 64.85 and 64.05 cents.
Comments
Comments are closed.