Cotton futures finished on Tuesday at a three-week high on late investor buying as players braced for the release of a key government crop report, brokers said. The December cotton contract in New York added 0.25 cent to end at 64 cents per lb. On the second position charts, it was the highest close for cotton since the middle of July.
The contract ranged from 62.42 to 64.14 cents. Volume in the December contract was at 6,559 lots at 2:49 pm EDT (1849 GMT). March cotton increased 0.51 cent to conclude at 66.39 cents. Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said the early weakness of the market was likely erased by the late advance of soybean futures in Chicago.
But dealings were very modest as most in the trade waiting for the release on Wednesday of the US Agriculture Department's monthly supply/demand report, the first for the 2009/10 marketing year (August/July). Johnson said the market fully expects the USDA to increase its estimate for US cotton production, especially after the crop in Texas recovered after a poor start during the spring planting season.
Texas plants about half of the 9.05 million acres (3.7 million hectares) sown to cotton in the United States. It is the biggest producing state in the country. Analysts said the key question for the cotton trade going into the report would be the rate of abandonment of cotton plantings in places like Texas.
Brokers Flanagan Trading Corp pegged resistance in the December contract at 64.05 and 64.95 cents, with support at 63.10 and 62.35 cents. Total cotton volume traded Monday reached 5,903 lots, from the previous 8,462 lots, exchange data showed. Open interest in the cotton market hit 128,151 lots as of August 10, from the previous 127,401 lots, ICE Futures US said.
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