Cotton futures finished firmer Wednesday due to combined trade and speculative buying as players covered short positions in front of a long holiday break, brokers said. The cotton market will be closed Thursday and Friday for Thanksgiving. Trading reopens on Monday.
The New York Board of Trade's March cotton contract rose 0.49 cent to settle at 52.12 cents per lb, moving from 52 to 53 cents. May cotton added 0.48 to 53.53 cents. Back months increased from 0.34 to 0.79 cent.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said fibre contracts snapped back now that pressure from the liquidation of positions in the spot December contract has abated. The focus will gradually turn to demand in the market, with attention fixed firmly on leading consumer China.
"At some point, China will have to step back into the marketplace," Johnson said, adding that prices may gradually improve over the next few sessions.
An improvement is also expected simply because of the large net short position held by speculators. "You get some short covering out of that and you should see a few cents added to the market," one broker said.
On demand, the market will be looking toward the US Agriculture Department's weekly export sales report which is being released a day late due to Thanksgiving.
Cotton brokers said they estimated total US cotton sales would range from 100,000 to 150,000 running bales (RBs, 500-lbs each), versus last week's sales of 167,700 RBs.
US cotton shipments of previously booked orders are seen ranging from 50,000 to 125,000 RBs, from last week's 146,600 RBs. Traders said support in the March contract would be at 52 cents, with resistance at 53 and 53.25 cents.
Floor sources said final volume hit around 18,000 lots, versus the previous tally of 28,967 lots. Open interest dropped 3,743 lots to 154,878 contracts as of November 21.