Cotton futures ended near their session highs Tuesday on a late round of speculative buying, though dealers said the market seemed poised to hold its recent range in the days ahead, analysts said.
The New York Board of Trade's December cotton contract finished up 0.39 cent to 49.25 cents a lb, a couple of points off the top of its 48.65 to 49.45 cent trading range. March gained 0.47 cent to close at 51.20 cents and the rest of the board settled flat to 0.52 cent firmer.
"We had two days of trying 49.50 and we couldn't make anything happen. We're just stuck in a really tight range," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia.
Cotton prices have traded in a 1.75 cent range during the past two weeks with little motivation to break out of the range as the funds have been adding to their net short position in the market, dealers said.
In its latest spec/hedge report for the week ended August 19, the New York Board of Trade reported speculators were 7.8 percent net short compared with a 4.2 percent net short position the previous week.
"The trend following funds added to their shorts this past week and their total net short position is probably greater than the 7.8 percent net short position shown because index funds, who only maintain long positions, are partially offsetting," wrote brokers Flanagan Trading Corp in a daily market comment.
In other news, Chinese and US negotiators will meet August 29, and again on August 30, in China to see if they can resolve their textile import issues.
Forecaster Meteorlogix saw mostly dry conditions with a few scattered afternoon and evening showers through Thursday in the US Mississippi Delta.
"Generally favourable conditions for the crop through the Southeast states. Hot/dry weather in the Delta increases crop stress likely leading to increasing boll loss," they wrote in a daily weather report.
Brokers Flanagan Trading Corp pegged resistance in the December contract at 49.10 and 49.80 cents, while support was seen at 48.00 and 47.25 cents.
Floor dealers said estimated final futures volume reached only 6,001 lots against the 7,567 lots recorded on Monday. Open interest rose 745 lots to 104,058 lots as of August 22.