NEW YORK: Cotton futures settled higher for the second straight day on Wednesday on investor short-covering, as the market rebounded from a one-month low on Monday, with traders saying the momentum should boost fiber contracts in the days ahead.
The July cotton contract on the ICE Futures US exchange rose 1.77 cents or 2.01 percent to finish at 90.02 cents per lb, dealing from 88.24 to 92.25 cents.
On Monday, the market closed at its lowest since March 20, according to Thomson Reuters data.
On a benchmark basis, the spot contract has remained trapped in a range between 87 and 94 cents since the start of March, Thomson Reuters data showed.
Wednesday's estimated volume was slightly more than 40,400 lots, some two thirds above the 30-day norm, according to Thomson Reuters data.
"It's not a fundamental (advance)," said Mike Stevens, an independent cotton analyst in Louisiana.
"Once the buying ran prices to limit, hedgers took advantage of the rally particularly in the December contract," he added.
Switch trade was again a top feature as players unwound positions in the spot contract before it goes into first notice day for deliveries next week.
Open interest in the May contract stood at 14,186 lots as of April 17, down 4,622 lots from the previous session.
Open interest amounted to 188,096 lots as of April 17, still near the 193,427 lots of April 5, which was the most in cotton since Feb. 15, 2011, ICE Futures US exchange data showed.
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