NYBOT cotton futures banked on trade and fund buying to finish higher Tuesday as the market rebounded from a fall to a one-month low due to a record US crop, analysts said.
Key December cotton rose 0.72 cent to settle at 48.13 cents a lb, moving between 47.50 and 48.40 cents. Monday, December closed at 47.41 cents in the lowest finish for the contract since settling at 47.32 cents on August 17. March gained the same to 49.84 cents.
Distant months increased 0.50 to 0.84 cent.
Keith Brown, president of commodity trading firm Keith Brown and Co. in Moultrie, Georgia, said trade buying gave the market a lift from the opening bell before fund short-covering piled in.
Mike Stevens of Swiss Financial Services in Mandeville, Louisiana, speculators had hammered futures. But the move in December below 47 cents uncovered enough consumer buying to stabilise the market.
"This is an area of demand," he said, adding the close above yesterday's high of 48 cents augured well for a further recovery in cotton.
Stevens said the market may slip into a trading range, since bearish fundamentals of a record crop in the United States and elsewhere are offset by heavy demand for cotton when futures sink.
Floor sources said the bulk of the trade buying that emerged in the pit came from those booking export orders.
"The last time the specs tried to hammer the market down, you had pretty good trade buying so you know the demand is there," one said.
Separately, the New York Board of Trade said its weekly spec/hedge report showed the funds with a net short position of 26.4 percent.
Brokers Flanagan Trading Corp. said support in the December cotton contract would be at 47.75 and 47.10 cents, with resistance at 48.30 and 49 cents.
Floor dealers pegged estimated final volume at 6,000 lots, from Monday's 15,341 lots. Open interest in the cotton market rose 1,517 lots to 70,803 lots as of September 20.