Cotton futures finished firmer Monday on investor buying in very light business, with analysts saying the market's momentum appear to point to an extension of its summer rally, analysts said. ICE Futures US benchmark December cotton contract rose 0.54 cent to finish at 84.09 cents per lb, trading from 83.57 to 85.26 cents.
-- Investors build up cotton long positions: COT report
Volume traded in the December contract hit 7,084 lots at 2:45 pm EDT (1845 GMT). Total volume traded at 2:45 pm was at 9,073 lots, some 40.03 percent below the 30-day average of 15,131 lots, preliminary Thomson Reuters data showed. Total open interest in the market, an indicator of investment interest in cotton, stood at 211,161 lots as of August 23, its loftiest level since September 2008, Thomson Reuters data showed.
"The market's got a headwind it hasn't had in a while," said Jobe Moss, an analyst for brokers and merchants MCM Inc in Lubbock, Texas. And the investors are plainly betting that cotton prices should go higher in the weeks ahead. The latest Commitment of Traders report showed the collective long position of non-commercial and managed money accounts at 109,047 lots, up 20 percent from last week's data.
Keeping cotton open interest and the COT data in mind, cotton futures seem poised to march higher, analysts said. "I am aware that cotton is oversold, but it looks like the market is paying little heed to that so we should keep probing higher this week," a dealer said.
Brokers Flanagan Trading Corp saw resistance in the December contract at 84.55 and 85.55 cents, with support pegged at 83.60 and 82.75 cents. Volume traded Friday hit 8,863 lots, compared with the previous tally of 12,160 lots, ICE Futures US data showed.