New York cotton futures close higher

Cotton futures closed higher on Thursday on speculative fund buying which spilled over from the sizzling gains posted by grains prices in Chicago, brokers said. "If it weren't for Chicago, I don't think cotton would be up at all," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia.
Analysts said cotton got a boost because the surge in corn and wheat prices meant cotton plantings in 2008 may suffer. ICE Futures open-outcry December cotton contract climbed 0.72 cent to settle at 66.67 cents per lb, dealing from 65.75 to 67.40 cents. It was the loftiest close for cotton since trading near 68 cents in mid-July.
March cotton gained 0.94 cent to 69.96 cents. Back months increased from 0.54 to 0.98 cent. The ICE electronic cotton market showed the December contract 0.75 cent higher at 66.70 cents at 3:10 pm EDT (1910 GMT), moving from 65.45 to 67.50 cents.
After spending the last three sessions probing support in the area of 65.15 cents, basis December, the market took off from the onset of trade when speculative fund buying inspired by the grains pit powered fibre contracts, dealers said.
"The funds really jumped in. It kind of tailed off at the top when trade sales and some profit-taking kicked in, but it did not really go too far down and the funds kicked it back up again," one explained. The underpinnings for the strength of cotton prices lay in widespread belief among trading sources that US cotton sowings in 2008 will fall because returns in corn, soybeans and wheat are infinitely more attractive than cotton.
US cotton plantings in 2007 are already at an 18-year low of 11.01 million acres, data from the US Agriculture Department showed. The market paid little heed to the USDA'S weekly export sales. Total US cotton sales reached 140,300 running bales (RBs, 500-lbs each), from 198,900 RBs last week and trade belief it would range from 100,000 to 200,000 RBs.
Broker Flanagan Trading Corp sees resistance in the open-outcry December cotton contract at 67 and 67.90 cents, with support at 66.25 and 65.60 cents. Open-outcry cotton volume Wednesday was 3,312 lots, while screen business reached 13,210 lots. Open interest in the cotton market rose 2,154 lots to 228,996 lots as of September 26.