New York cotton futures move upward

27 Jun, 2007

US cotton futures jumped 1 percent on Tuesday, joining a rally on most agricultural products, as metals and energy assets saw a sell-off by investors trying to scale back exposure on risky markets. Traders said cotton also benefited from technical buying ahead of a key government plantings report due Friday.
Which is expected to cite a smaller area under cotton than initially forecast owing to weather and other complications. "There was certainly some hedging going on in relation to the plantings report, but part of today's rise had to do with the broader run-up in softs and ags as metals and oil took a hit," said a cotton trader in Georgia.
The New York Board of Trade's key December cotton contract settled up 0.66 cent at 61.45 cents per lb, after trading between 61.00 and 61.70 cents. The back months closed up 0.60 to 0.70 cent. IntercontinentalExchange's NYBOT electronic cotton market showed the December contract up 0.46 cent at 61.25 cents at 2:50 pm EDT (1850 GMT).
The US Department of Agriculture is expected to declare a total area of 11.72 million acres under cotton in its report on Friday, marking a drop of about 430,000 acres from a March survey, industry analysts said. The latest forecast has kept NYBOT's December contract above the key technical level of 61 cents a lb since June 20. Volume in NYBOT cotton on Tuesday was estimated at 11,220 lots. Open interest fell 1,435 lots to 202,316 lots.

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