Cotton futures finished higher Thursday on investment fund buying as the market bounded up on the back of rallies in grains and other commodity markets. The key December cotton contract rose 0.69 cent to end at 81.77 cents per lb, dealing from 81.01 to 82.24 cents.
Spot July cotton added 1.11 cents to finish at 74.09 cents, trading from 72.82 to 74.25 cents. Volume traded in the December contract stood at 11,600 lots at 2:46 pm EDT (1846 GMT) while July volume amounted to 104 lots.
"We followed the outside markets. This was just the bulls' day out," said Mike Stevens, senior analyst for brokers SFS Futures in Mandeville, Louisiana.
Cotton was well-supported by a rally whose main catalyst was the weak dollar, dealers said. Corn prices soared the 30-cent limit to a record high and this bolstered buying in fibre contracts as well, traders said. Stevens said the December cotton contract appears trapped in a band running from around 79 to 82.50 cents. He said an upcoming government plantings report may keep the contract pinned in this band.
"Unless there's a shock and surprise, it's going to be difficult to get it out of its trading range," said Stevens. On Monday, the US Agriculture Department will be releasing its annual and much-awaited planted acreage report. The market showed little reaction to the weekly USDA export sales data.
USDA said total US cotton sales stood at 29,000 running bales (RBs, 500-lbs each), from 43,500 RBs in last week's report and trade belief it would range from 40,000 to 100,000 RBs. USDA said US cotton export shipments of previously booked orders hit 286,600 RBs, against 312,800 RBs in last week's report.
Brokers Flanagan Trading Corp sees support in the December contract at 81.35 and 79.60 cents, with resistance at 82.15 and 83.80 cents. Volume traded Wednesday hit 12,152 lots, exchange data showed. Open interest in the cotton market rose 1,029 lots to 215,041 lots as of June 25, ICE Futures US said.