Cotton futures settled at a two-month high Thursday on speculative buying as the market appeared to be bucking bearish fundamentals while waiting for news on hurricane damage in the US Delta, brokers said.
The New York Board of Trade's benchmark December cotton contract rose 0.50 cent to finish at 54.41 cents a lb, in a band from 53.35 to 54.45 cents. It was the best close for the contract since trading near 55 cents in mid-July.
March went up 0.28 cent to 55.60 cents. The rest ranged from 0.55 cent easier to 0.40 cent steadier.
"We're attempting to consolidate Tuesday's gains," said Keith Brown, president of commodity trading firm Keith Brown and Co in Moultrie, Georgia. He added that end-of-the-month and end-of-the-quarter booksquaring by investors added to the push in futures to crawl higher.
Mike Stevens, an analyst for SFS Futures in Mandeville, Louisiana, said small speculators tried to press the market lower in early trade, but "when the selling slowed, speculative and fund interest" near 53.30 cents, basis December, sparked a bounce in the market.
Fundamentally, cotton is supposed to be weighed down by large crops in countries like the United States. But talk of problems confronting the harvest in China, the world's biggest consumer of cotton, may have provided support for futures, the dealers said.
The weekly US Department of Agriculture export sales report provided little inspiration to cotton.
USDA showed US cotton sales at 248,400 running bales (RBs, 500-lbs each), slightly above trade belief it would range from 150,000 to 200,000 RBs.
US cotton shipments of previously booked orders stood at 208,400 RBs, compared with trade belief it would reach between 150,000 to 250,000 RBs.
Brokers Flanagan Trading Corp sees resistance in December cotton at 54.50 cents, with support at 54.10 and 53.25 cents.
Floor dealers said estimated final volume at 15,000 lots, from the previous tally of 22,538 lots. Open interest in the cotton market increased 1,515 lots to 109,189 lots as of September 28.