Cotton futures banked on all-around to close higher Thursday and operators said news on suspected Chinese buying may filter out to the market over the next few weeks. The New York Board of Trade's July contract rose 0.61 cent to settle at 57.02 cents a lb, dealing from 55.50 to 57.45 cents. Spot May gained 0.70 to 58.40 cents and the rest rose 0.10 to 0.60 cent. "The trend is up. They're stretching it out," said Keith Brown of commodity trading firm Keith Brown and Co in Moultrie, Georgia.
The market dropped to its lows for the session at the start due to disappointment over the weekly US Department of Agriculture export sales report.
USDA said US cotton sales stood at 227,000 running bales (RBs, 500-lbs each), sharply below trade belief it would range from 250,000 to 600,000 RBs. US cotton shipments of previously booked orders amounted to 370,100 RBs, from trade belief of 350,000 to 450,000 RBs.
Analysts said the market had been banking on confirmation that top merchant Dunavant Enterprises had booked a large order of cotton for sale to China.
But USDA said sales to China reached only 39,500 RBs, below the trade expectation of up to 500,000 RBs.
The discouraging news quickly dissipated when operators said Dunavant did not have to report the sales immediately and the merchant can log them only when the cotton has been shipped.
Trade, speculative and fund buying piled into the market to drive prices to their highs before the July contract stopped just short of its 10-month high at 57.47 cents reached on Tuesday.
Analysts said news the Bush administration will investigate a surge in Chinese textile imports did not affect the market since any decision will take time to reach.
Brokers Flanagan Trading Corp put support in the July cotton contract at 56.15 and 55.50 cents, with resistance at 57.80 and 58.60 cents.
Floor dealers said estimated volume stood at 10,500 lots, down from Wednesday's count of 12,346 lots. Open interest rose 257 lots to 119,453 contracts as of April 27.