Cotton futures closed largely higher on Tuesday on investor buying as the market was content to move in a range while waiting for leads on its next move, brokers said. The key May cotton contract rose 1.08 cents to end at 81.84 cents per lb, dealing from 80.11 to 81.95 cents. July cotton rose 1.07 cents to finish at 82.39 cents.
But new-crop December eased 0.56 cent to close at 75.07 cents. Volume traded in the May contract was at 7,588 lots at 2:31 pm EDT (1831 GMT). "It's still a bull market so the path of least resistance is up," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia. He said fibre contracts derived encouragement from the weaker tone of the dollar and steadier outside markets.
But there is no compelling reason for cotton to break out of its current range from 78 to 84 cents, analysts said. Brown said the market could well stay in this band until the US Agriculture Department hands out its annual potential plantings report on March 31. For this week, the market will take a look at the USDA's weekly export sales report and keep monitoring the start of the spring planting season in the US cotton belt.
With little news, analysts said there is little incentive to break out of the trading band in cotton at this time. Brokers Flanagan Trading Corp sees resistance in the May cotton at 82.65 and 83.50 cents, with support pegged at 81.40 and 80.35 cents. Volume traded Monday in the cotton market was at 10,203 lots, from the previous 13,432 lots, according to data from ICE Futures US Open interest in the cotton market stood at 184,861 lots as of March 15, versus the prior count of 186,021 lots, the exchange said.
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