Cotton futures rose for the first time in five sessions on Monday as lower prices following four straight sessions of losses attracted mill fixations and speculators covered short positions. The most active July cotton contract gained 0.1 cent, or 0.2 percent, to settle at 63.39 cents a lb, after dropping as low as 62.96 cents a lb, the lowest since April 2.
Front-month May cotton fell 0.25 cent, or 0.4 percent, to settle at 63.04 cents a lb. The gains came after four consecutive sessions of losses, including a sharp decline on Friday after July cotton fell below its 200-day moving average, a key technical level.
This brought prices down to levels that attracted buying from physical end users, after demand had been largely absent in recent weeks due to relatively high prices, which hit six-month highs on April 8. "We've been in a longer-term uptrend here" since multi-year lows hit in late January, said Louis Rose, independent cotton trader and consultant at Risk Analytics in Memphis, Tennessee. "We're down to where we can sell cotton again." The drop in prices could have also prompted speculators to cover short positions, Rose said.
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