Cotton futures finished on Monday with moderate gains as some investors took advantage of the 3-3/4-year lows hit last week, but volume was light and the range narrow as most players held to the sidelines ahead of the US presidential election, brokers said.
"We were a little oversold, so we're up some. And, of course, everyone's waiting for the results of tomorrow's election," said Keith Brown of Keith Brown and Co in Georgia. The key December cotton contract rose 0.39 cent to finish at 44.68 cents per lb, after setting a slim range between 44.36 and 45.14 cents a lb. On Friday, the December contract tumbled to a new lifetime low of 43.64 cents, a level last seen in February 2005.
Analysts pointed out that, historically, October has proven to be a reversal month for cotton prices, meaning that a long-term high or low is set, depending on the trend direction. If the pattern remains consistent this year, they said, the cotton market could launch a November rally. Brokers Flanagan Trading Corp saw support for December cotton at 44.30 then 43.45 cents, with resistance at 46.65 and 47.40 cents.
On Friday, cotton futures volume came to 25,981 lots, compared with 23,610 lots in the previous session, exchange data showed. Open interest in the cotton market fell by 3,625 lots to 170,969 contracts as of October 31, it said.
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