US cotton futures finished at a four-day high on Friday, finding firm footing from surprisingly healthy export sales shown in a government report, analysts said. "Cotton prices are up 40 points on a supportive export sales report," said John Flanagan of Flanagan Trading Corp in North Carolina, referring to the US Department of Agriculture's weekly export sales figures.
USDA reported cotton sales reached 196,100 running bales in the week ended January 12, with China taking half of those sales, he said, added that 22,500 new crop bales were sold and shipments improved to 251,100 running bales in the week. Benchmark March cotton futures advanced 0.43 cent to settle at 98.60 cents per lb, after setting a higher low at 97.41 and a higher high at 98.70 cents.
The contract closed at the four-day high, building on the uptrend that began at the 17-month low hit on December 14. Friday's volume declined to 8,939 lots in late business, well below the 14,500 lots traded late on Thursday, according to preliminary Thomson Reuters data. Friday's volume was about 12 percent above the 30-day average but 16 percent below the 250 day average.
Friday was also the last trading day before the Chinese New Year (year of the Dragon), Flanagan noted, with prices supported by the idea Chinese players may do some late buying. Other technical resistance targets loom at 99.95 cents a lb, though a breach of the key $1 psychological level could then lead to targets at $1.0205, $1.0520 and $1.0810, said Flanagan.
A close in the March contract below Tuesday's low of 95.67 cents would likely lead to further losses leading down to 94, then 91 cents, analysts said. Total volume traded on Thursday came to 14,482 lots, lower than Wednesday's tally of 19,691 lots, ICE Futures US data showed. Cotton's open interest - an indicator of investor exposure - rose to 157,614 lots as of January 19 from 155,972 lots on January 18, the exchange said.
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