Cotton futures settled near a 16-month high on Friday on investment fund buying and the momentum from the rally could push fibre contracts higher into next week, brokers said. The spot December cotton contract climbed 1.59 cents to settle at 70.41 cents per lb, trading from 68.95 to 70.92 cents. On the spot daily charts, it was the highest close for cotton since the end of July 2008.
December contract volume reached 6,815 lots at 2:50 pm EST (1950 GMT). Most-active and now benchmark March cotton added 1.07 cents to close at 74.04 cents, moving between 72.97 and 74.19 cents. Cotton futures extended the gains they posted in Thursday's business, said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia.
Despite weakness in other markets and the steadier tone of the US dollar, which normally would depress commodity values, investors in cotton believe it's "full steam ahead" for fibre contracts, she said. Investors were also unwinding their remaining positions in the December cotton contract, which goes into delivery on Monday. Open interest in the December contract stood at 6,497 lots as of November 19, down 5,947 lots from the previous session.
Johnson believes some follow-through activity could pad cotton futures early next week and then drift quietly ahead of the long holidays. US commodity and financial markets will be shut Thursday for Thanksgiving. Next Friday's session will shut early.
The markets reopen on Monday. Total cotton volume traded Thursday hit 21,167 lots, down from the prior tally of 25,801 lots, ICE Futures US said. Open interest in cotton stood at 169,208 lots as of November 19, from the prior count of 169,088 lots, the exchange said.
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