NY cotton rebounds to end firmer, eyes USDA report

NEW YORK: Cotton futures settled higher Wednesday as the market rebounded from a 10-month low as investors tweaked their positions before release of a key crop report tomorrow, analysts said.

The key December cotton contract on ICE Futures US added 2.00 cents to finish at 97.80 cents per lb, trading from 95.76 to 99.03 cents. It was an inside day since the range was within Tuesday's 93.72 cents to $1.039 range.

On Tuesday, the contract finished at 95.80 cents in the lowest settlement for the second position cotton contract since the middle of September 2010, Thomson Reuters data showed.

Total volume traded hit almost 10,000 lots, around a third below the 30-day norm, Reuters data said.

"It's short-covering ahead of the report," said Jobe Moss, an analyst for brokers and merchants MCM Inc. in Lubbock, Texas.

The market is looking forward to the US Agriculture Department's monthly supply report on Thursday, the first for the 2011/12 marketing year (August/July).

Analysts said the focus will mainly be on whether USDA adjusts its demand forecasts lower.

A Thomson Reuters poll expected domestic cotton production in 2011/12 would be cut to an average of 15.29 million (480-lb) bales, down 15.5 percent from last season's 18.1 million bales crop.

For a factbox on US cotton plantings and production from 1998 to 2010,

Total volume traded Tuesday hit 18,734 lots, from the prior session's 15,546 lots, ICE Futures US data showed.

Open interest was at 142,543 lots as of Aug. 9, against the previous session's 142,813 lots, exchange figures showed.

Copyright Reuters, 2011