US cotton futures closed higher Thursday on speculative and possible mill buying as players adjusted positions one day before the end of a year in which prices charged to a 150-year high, analysts said. The key March cotton contract on ICE Futures US rose 2.41 cents to finish at $1.4284 per lb, moving from $1.3755 to $1.4443.
-- Players mull further gains after historic 2010 rally
Volume was seen around 18,200 lots, about 20 percent below the 30-day norm of about 22,300 lots, Thomson Reuters preliminary data showed. The cotton market is on track to be one of the best performing commodities in the Reuters-Jefferies commodity index, up over 78 percent year to date as the market scaled a level unseen since the US Civil War in the 19th century.
"A lot of the volume is spread trading," said Sharon Johnson, senior cotton analyst at commodities brokerage Penson Futures in Atlanta, Georgia. "It takes nothing to move this market." Analysts said most investors in cotton have abandoned their trading desk and will not return until after the New Year.
"The underlying fundamental support of strong demand is now likely to continue as cotton is still needed here and in other countries as well (in 2011)," said a report by Jack Scoville, an analyst for brokers The Price Group in Chicago. Early weakness dragged cotton down to its lows for the day, but the market recovered on mill and speculative buying to end near the upper half of its trading range on Thursday.
Cotton prices in China were slightly firmer, with the May cotton futures on the Zhengzhou Commodity Exchange last traded at 27,855 yuan per tonne, up 560 yuan on the day. The market digested the US Agriculture Department's weekly export sales report which showed US cotton sales at 277,700 running bales (RBs, 500-lbs each), above trade belief it would range from 150,000 to 250,000 RBs.
Comments
Comments are closed for this article.