Cotton futures settled on Friday at a threw-week top as rallies in the commodities complex spilled over into the market and the momentum could spur fibre contracts up into next week, traders said. ICE Futures' open-outcry March cotton contract rose 0.68 cent to close at 69.09 cents per lb, ranging from 68.25 to 69.45 cents.
Based on the spot daily closing charts, it was the loftiest performance for cotton since late January when it traded close to 70 cents. May cotton gained 0.68 as well to 70.82 cents. The new-crop December cotton contract increased 0.81 cent to 77.51 cents. The March electronic cotton contract went up 0.58 cent to 68.99 cents a lb at 3:15 pm EST (2015 GMT), after running between 68.23 to 69.41 cents.
"Why shouldn't cotton come into the party," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia. The all-around buying was sparked by rallies in other commodity markets, especially in the grains ring, and combined with the rolling of positions of a commodity index fund to inspire an advance in fibre contracts.
The market gave scant attention to the US Agriculture Department's monthly supply/demand report which some in the trade felt should have dragged cotton futures south.
USDA raised 2007/08 world cotton ending stocks to 57.33 million (480-lb) bales from 54.75 million last month and chopped lower world 2007/08 cotton consumption to 126.32 million bales against 128.02 million. "The market is simply not looking at that at this time. The funds are pouring into commodities like cotton because they simply feel it is undervalued especially when compared to what you are seeing in wheat and soybeans for instance," a trading house broker explained.
Brokerage Flanagan Trading Corp sees resistance in the March open-outcry cotton contract at 69.30 and 70 cents, with support at 68.60 and 67.75 cents. Open-outcry volume Thursday was 11,704 lots and screen business was 31,351 lots. Open interest in the cotton market fell 641 lots to 283,786 lots as of February 7, exchange data showed.