Cotton futures finished on Friday at a fresh three-month high on speculative buying and the market may use the momentum from this advance to extend its gains next week, brokers said. ICE Futures open-outcry December cotton gained 0.25 cent to close at 65.40 cents per lb, trading from 64.55 to 65.49 cents.
It was the highest close for cotton since trading near 66 cents in mid-July. March gained 0.30 to 69.32 cents. The rest increased 0.20 to 0.60 cent. The ICE December electronic cotton contract added 0.25 cent as well to 65.40 cents at 2:45 pm EDT (1845 GMT), dealing from 64.51 to 65.50 cents. "We're holding our gains so that's encouraging," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia.
She said other commodity markets provided a mixed bag for cotton contracts, with the CRB commodity index sinking while wheat prices remained strong in Chicago grains markets.
Market participants took note of news that analytical firm Informa Economics was said to have forecast US 2008 cotton sowings at 9.4 million acres, much lower than the estimate by the chief economist of the US Agriculture Department at 10 million acres. US cotton plantings in 2007 stood at an 18-year low of 11.01 million acres.
Traders said cotton was hit by early profit taking and hedge sales, but losses were limited and late short covering enabled the market to post modest gains going into the close of business.
Brokers Flanagan Trading Corp sees resistance in the open-outcry December cotton contract at 65.60 and 66.20 cents, with support at 64.85 and 64.05 cents. Open-outcry cotton volume Thursday was 7,846 lots, while screen business reached 21,766 lots. Open interest in the cotton market rose 3,593 lots to a revised 239,741 lots as of October 18.
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