Cotton futures finished Friday at their highest level in five months on speculative fund buying and news that US cotton plantings in 2008 may fall to a 25-year low, brokers said. ICE Futures open-outcry March cotton contract climbed 0.94 cent to finish at 65.85 cents per lb, trading from 64.62 to 65.90 cents.
On a spot closing basis, it was the highest finish for cotton since the middle of July. May rose 0.86 to 67.22 cents. One contract aside, the rest were flat to up 1.10 cent. The ICE March electronic cotton contract was up 0.93 cent to 65.84 cents at 2:54 pm EST (1954 GMT), with volume in the contract at 9,655 lots.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the close of the key March contract above 65.50 cents meant the market may be taking aim at higher ground next week and was "encouraging" for cotton bulls. "We've had a 66.50 (cents) objective all week," he said.
Analysts said positive backdrop was also provided by news that Memphis, Tennessee-based analytic firm Informa Economics forecast US 2008 cotton plantings at 9.185 million acres, below the 10.847 million sown in 2007. If that amount is planted, it would be the lowest sown to cotton since 1983, when 7.926 million acres were planted, according to data from the US Agriculture Department.
Futures slipped in early trade, but the market easily recovered and moved higher on speculative buying, dealers said. "Clearly, the move into new highs for the week triggered a round of 'market on close' buying on technical considerations," Stevens said.
Brokers Flanagan Trading Corp sees resistance in the March open-outcry cotton contract at 66 and 66.70 cents, with support at 65.20 and 64.55 cents. Open-outcry cotton volume Thursday was 2,012 lots and screen trade 14,239 lots. Open interest in the market rose 396 lots to 216,250 lots as of December 13, according to exchange data.
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