Cotton futures closed higher on Tuesday on improved demand expectations from China and broad gains in soft commodities, traders said. The key July cotton contract climbed 1 cent to end at 82.20 cents per lb, trading from 81.35 to 82.44 cents. Volume traded in the July contract stood at 8,613 lots at 2:30 pm EDT (1830 GMT). New-crop December cotton futures ended 0.49 cent higher at 77.91 cents, ranging from 77.40 to 77.95 cents.
Traders in China said that rising demand from the world's most populous country would boost prices. Also, gains in other agricultural commodities including coffee, cotton and citrus also boosted the cotton markets, they said. China will remain in 2010 the key driver in commodities markets' strong rebound, with rubber one of the star sectors led by resilient growth in the Chinese car industry, a French commodity analyst said on Tuesday.
On Monday, traders said China will soon issue additional import quotas for cotton to cover a deficit, with domestic prices rising and futures prices at record highs. Going forward, analysts the market must contend with how the certificated cotton stocks on ICE Futures US would be disposed in the coming weeks. Those stocks now stand at about 1.062 million (480-lb) bales, with no bales being decertified.
Volume traded Monday reached 13,768 lots, against the previous tally of 10,053 lots, according to ICE Futures US Open interest in the cotton market was at 181,049 lots as of May 17, up from the prior 178,787 lots, the exchange said.