ICE cotton futures on Monday rose for the first time in six days as the contract reached technically oversold territory, and a move to the lowest levels in more than six months prompted short-covering and some new speculative buying.
"When we couldn't force a new life-of-contract low in December, that encouraged short-covering and some bottom-picking," said Keith Brown, a Moultrie, Georgia-based cotton trader.
The move lower saw the December contract come close to its contract low of 61.28 cents a lb. It did not reach that level on Monday, but "the test has not been averted fully," Brown said.
December cotton on ICE Futures US settled up by 0.17 cent on Monday, a 0.3 percent gain, at 61.96 cents per pound. It traded within a range of 61.50 and 62.90 cents a pound.
Total futures market volume rose by 1,305 to 24,317 lots. Data showed total open interest increased 837 to 183,978 contracts in the previous session.
Certificated cotton stocks deliverable as of August 7 totaled 100,781 480-lb bales, down from 102,490 in the previous session.
The dollar index was down 0.38 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 2.08 percent.
Speculators cut their net long position to 34,398 from 40,502 in the week ended August 4, according to US government data released Friday after market close.
The Relative Strength Index in the most-active contract rose to 32.989.