Cotton futures closed slightly firmer on Wednesday on investor short-covering as the markets correction from a 5-1/2 week top abated and players eyed release of a key crop report next week, brokers said. The key May cotton contract gained 0.27 cent to conclude at 44.58 cents per lb, dealing between 43.82 and 44.79 cents. On Monday, the contract finished at 45.03 cents in the highest close for cotton since mid-February.
July rose 0.29 cent to finish at 45.57 cents. Volume traded in the May contract was at 4,671 lots at 2:35 pm EDT (1835 GMT). "Its hard for us to go up and down a great deal until the numbers go out," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia. She was referring to the US Agriculture Departments annual potential plantings data due out on March 31.
Most commercial players believe 2009 US cotton plantings will range from 8.5 to 9.0 million acres, down from last years 9.4 million. The industry group National Cotton Council pegged US 2009 cotton sowings at 8.1 million acres in its annual survey last February. Johnson said cotton futures will trade in a band leading up to the report as long as no major surprises or gyrations erupt in the dollar and in stocks, oil or other commodity markets.
Separately, cotton brokers said they expect the USDAs weekly export sales data to show US cotton sales ranging from 150,000 to 200,000 running bales (RBs, 500-lbs each), from sales last week at 218,300 RBs. Brokerage Flanagan Trading Corp sees resistance in the May contract at 44.75 and 45.60 cents, with support at 43.60 and 42.75 cents. Volume traded Tuesday reached 9,221 contracts, from the previous tally of 11,976 lots, exchange data showed. Open interest in the cotton market was at 137,552 lots as of March 24, from the prior tally of 135,800 lots, it said.
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