Cotton futures settled slightly firmer on Thursday on investor buying as the market appears to be consolidating ahead of a government sales report on Friday, analysts said. Benchmark March cotton futures rose 0.64 cent to end at 98.17 cents per lb, moving from 96.76 to 98.50 cents.
The close was within a hair of the Tuesday close in the contract of 98.19 cents, the highest settlement for the spot contract since mid-November, Thomson Reuters data showed. Volume on Thursday hit almost 14,500 lots, less than 2 percent above the 30-day norm, according to preliminary Thomson Reuters data. "It's consolidating for the day," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
Analysts said cotton was also probably getting a boost from the stronger tone of world markets. Market sources said players would now be waiting for release on Friday of the US Agriculture Department's weekly export sales report at 8:30 am EST (1330 GMT). On a technical basis, traders said a close in the March contract below Tuesday's low of 95.67 cents would likely lead to further losses in fibre contracts. If that happens, the March contract may slip further to 94 and then 91 cents, analysts said.
Topside, the target remains at the psychological $1 level. Total volume traded on Wednesday reached 21,582 lots, from the prior count of 32,156 lots, ICE Futures US data showed. Cotton's open interest - an indicator of investor exposure - stood at 155,972 lots as of January 18, from 155,162 lots on January 17, the exchange said.
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