Cotton futures settled higher on Wednesday on investment fund buying in a technical surge that should persist ahead of the holiday weekend, brokers said. The new-crop December cotton contract rose 3.00 cents to close at the day's top of 60.48 cents per lb, with the session low at 57.48 cents.
Volume traded in the December contract was at 12,305 lots at 2:36 pm EDT (1836 GMT). The March cotton contract added the same to end at 62.72 cents. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the close over the Tuesday high of 58.94 cents, basis December, changed the technical picture.
"We blew (automatic buy order) stops," he said, adding the momentum from the rally should spur the market higher. He said talk that investment funds were doing some "quarterly rebalancing...have brought them back into the market." Analysts said the covering could be extended before the cotton market shuts Friday for a holiday. Trading resumes on Monday. The market will take a look at the US Agriculture Department's weekly export sales report.
Cotton brokers expect total US cotton sales to range from 150,000 to 250,000 running bales (RBs, 500-lbs each), against sales in last week's report of 262,800 RBs. US cotton export shipments are seen hovering around 300,000 RBs, against shipments in last week's data of 284,900 RBS.
Brokers Flanagan Trading Corp put support in the December contract at 59.70 and 58.65 cents, with resistance at 60.50 and 61.60 cents. Total volume traded Tuesday reached 9,319 lots, versus the previous tally of 3,430 contracts, exchange data showed. Open interest was at 108,256 lots as of June 30, from the previous count of 107,952 contracts, ICE Futures US said.