Cotton futures finished up by their daily limit on Friday on modest investor buying as the market's ability to hold this week's low prompted some mills to begin booking orders, analysts said. The key December cotton contract on ICE Futures US rose by the 4.00-cent daily limit to finish at $1.052 per lb, off a session low of 96.15 cents. On the week, the market is down 1.04 percent.
On Tuesday, the contract finished at 95.80 cents - the lowest settlement for the second-position cotton contract since the middle of September 2010, Thomson Reuters data showed. Total volume traded hit almost 10,000 lots, just under a third below the 30-day norm, Reuters data showed. Earlier in the week, the cotton market took a hit along with other commodities from investor liquidation caused by a US credit downgrade.
As a result, open interest in cotton was at 140,442 lots as of August 11, the lowest in over two weeks, ICE Futures US data showed. Sharon Johnson, senior cotton analyst at commodities brokerage Penson Futures in Atlanta, said cotton should see "some more follow-through (buying)" given the way it ended this week. Traders said a combination of technical short-covering and fundamentals that seemed to show increased mill interest stoked the market's advance.
Some of the mill interest was said to be from China, the world's biggest cotton producer and consumer for its apparel industry, they said. There is some improvement in mill demand, Johnson said. On Monday, the trade will eye the US Agriculture Department's weekly crop progress report to gauge the condition of the US 2011/12 cotton harvest. Total volume traded on Thursday hit 11,847 lots, from the prior session's 11,353 lots, ICE Futures US data showed.
Comments
Comments are closed.