Cotton futures settled firmer Friday on speculative and options-related buying and the steady tone of the market may herald further modest gains next week, analysts said.
The New York Board of Trade's March cotton contract gained 0.18 cent to finish at 53.68 cents per lb, moving from 53.20 to 54.10 cents. May cotton added 0.15 to 54.90 cents. The rest ranged from 0.43 cent up to 0.10 cent easier.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said fibre contracts appear poised to "make another run to the highs" after a session in which it built on its recent gains.
For now, she said cotton contracts will probably "need to do some backfilling" and consolidate its advance.
Futures had risen in the previous session, buoyed by robust purchases of US cotton from mills who attended the biannual meeting of the US cotton industry in Arizona.
Fundamentally, the harvest is winding down or has finished in the US and attention is gradually turning to the pace of demand for cotton in the world market, particularly from top consumer China.
Traders said that aside from the US Agriculture Department's weekly export sales report, the market will also be looking toward the USDA's monthly supply demand report due out on December 11 for an update on the global cotton market.
Futures slipped at the start but quickly ran into support and the steady buying from speculative fund accounts ensured the market finished in positive territory, dealers said.
"Fundamental reasons often emerge after the fact and we should have a sense as to exactly why cotton futures have rallied as much as they and as quickly as they have over the next week or so," a report by Johnson said.
Brokers Flanagan Trading Corp sees support in the March contract at 53 and 52.60 cents, with resistance at 53.80 and 54.50 cents. Floor sources said final volume hit around 18,500 lots, versus the previous tally of 26,524 lots. Open interest rose 106 lots to 159,914 contracts as of November 30.