Late investor buying lifted cotton futures to finish on Tuesday at a two-month high and follow-through interest may push the market up into the New Year holiday break, brokers said. The key March cotton contracts climbed 1.72 cents to end at 47.97 cents per lb, after moving from 46.26 to 48.39 cents.
It was the highest close for cotton since late October when it was trading around 49 cents. Volume traded in hte March contract was at 6,219 lots at 2:37 pm EST (1937 GMT). Dealings also were very modest, with many players already gone for the New Year holiday. The cotton market is shut Thursday and reopens for business on Friday, January 2.
Cotton may also have received background support from talk that production in India may be reduced further by, the US Agriculture Department in its monthly supply-demand report. Last month, the USDA cut its estimate of Indian cotton production in 2008-09 to 24 million (480-lb) bales from 25 million in its last report.
Brokers Flanagan Trading Corp sees support in the March contract at 47.15 and 46.25 cents, with resistance pegged at 48 and 48.95 cents. Volume traded on Monday reached 4,454 lots, exchange data showed. Open interest in the cotton market hit 124,265 lots as of December 29, from the previous 123,934 lots, it said.
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