New York cotton futures settle firmer

Cotton futures finished firmer on Tuesday, lifted by news that Hurricane Gustav in the central Caribbean was speeding up as it headed north-west and some participants feared its impact may impair US crops, brokers said. Key December cotton futures settled 34 cents higher at 69.46 cents a lb. The contract traded in an inside range, a higher low at 68.26 and a lower high at 69.94 cents a lb.
After hours, December cotton was up 0.53 cent, or 0.77 percent, at 69.65 cents. By 3:12 pm (1912 GMT), the December contract volume came to 6,726 lots. Cotton prices stayed strong throughout the session as news that Hurricane Gustav's wind speed accelerated and could impact Texas cotton crop by next week - brokers. Hurricane Gustav's winds increased to 90 mph as it churned toward south-western Haiti and headed north-west.
Hurricane Gustav could threaten Gulf of Mexico oil production off the coasts of Louisiana and Texas by the middle of next week, an AccuWeather Inc meteorologist said. "Gustav certainly reversed crude oil, which was lower this morning and that certainly could ramp up commodities in general," said Keith Brown of Keith Brown and Co in Georgia. Brown added that some damage occurred to cotton crops across the Southeast from the effects of Hurricane Fay.
"Several clients told me that cotton that was opening got knocked to the ground. If we get hit with another storm and copious amounts of rain it could impale the crop," he said. After a sharp and sudden decline in prices on Monday, cotton may still have unfinished technical business to the upside - brokers. Longer-term, some analysts said they see cotton as cheap with the drop in US cotton plantings keeping prices supported as well as declines in output in most producing countries.
In Texas cotton regions, forecasts show mostly dry conditions through Saturday with temperatures mostly above normal, according to DTN Meteorlogix. Brokers Flanagan Trading Corp identified support in the December contract at 69.30 and 68.50 cents, and resistance at 70.00 and 70.95 cents. Monday's volume came to 12,390 lots, exchange data show. Open interest in cotton futures rose by 970 lots to 216,221 open contracts as of August 25, exchange data show.