Cotton futures settled on positive ground Tuesday, for the third consecutive session, thanks to speculators buying back their short positions amid relatively thin trading volume, market sources said.
The New York Board of Trade's July cotton contract gained 0.19 cent to settle at 51.13 cents a lb, after ranging from 50.75 to 51.30 cents - the loftiest since May 3.
"We just saw a little short-covering rally here at the end," said a trader, speaking from the NYBOT cotton ring.
"It was pretty quiet all day," he said, noting that market participants appeared to be holding back before Friday when the USDA releases its world cotton supply/demand summary.
Among other cotton futures, New-crop December climbed 0.36 cent to end at 55.45 cents, and back months advanced 0.30 to 0.50 cents.
The July contract has risen 2.4 percent since bottoming at a 1-1/2-year low of 50.08 cents a lb on May 4.
"I think the price action over the last couple of days sure hints that we've made the low in here," said Jobe Moss, an analyst for brokers and merchants MCM Inc.
"The funds have a healthy short position. Unless we make some new lows, they may add to their short positions. But if you can get a couple of closes above 56.25 in December, you are going to get some short-covering," he said.
Mike Stevens, an analyst for brokers SFS Futures in Louisiana, said the market had been weakened over the past three months in the face of record exports.
"There is not any reason to have to go lower. But to go higher you are going to have to do something technically," he said.
Futures turnover fetched an estimated 9,200 lots, up from with an official count of 7,532 lots the previous day. Open interest rose 498 lots to 152,882 contracts as of May 8.