New York cotton futures settle higher

Cotton futures settled higher Wednesday on commercial and trade buying as they recovered after hitting a new low although the technical outlook remains gloomy, brokers said. New York Board of Trade's open-outcry July cotton contract closed up 0.40 cent at 48.62 cents per lb after dealing from 48.70 to a new lifetime low of 47.78 cents.
New-crop December gained 0.44 to 53.20 cents and the rest rose from 0.20 to 0.70 cent. IntercontinentalExchange's NYBOT electronic platform for cotton showed July delivery up 0.41 cent at 48.63 cents at 2:31 pm EDT (1831 GMT), moving from 48.68 to a contract low of 47.75 cents.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said merchant-related options pressure dragged the market down to new lifetime lows but that once that petered out, commercial and trade buying stepped up.
He said there was "insufficient spec selling" to further depress cotton, but the market would need to eclipse the Tuesday high in the July contract of 48.90 cents to indicate the possibility of a trend reversal.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said the market's downturn "prompted renewed interest...by Indonesia, Thailand, Taiwan and Turkey so export sales continue in good volume." On another front, cotton brokers expect the weekly export sales report of the US Agriculture Department to show robust sales of US cotton.
They expect total US cotton sales to range between 400,000 and 600,000 running bales (RBs, 500-lbs each) from last week's sales of 556,900 RBs. US cotton shipments of previously booked orders are seen running from 300,000 to 400,000 RBs, versus last week's 362,500 RBs, they said. Brokers Flanagan Trading Corp sees support in the July contract at 48.10 and 47.60 cents, with resistance at 48.70 and 49.25 cents.
Floor dealers said estimated final volume stood at 9,000 lots, from the prior total volume of 30,049 contracts. NYBOT said electronic trading volume Tuesday amounted to 12,829 lots. Open interest was at 221,467 lots as of May 1, up 686 lots from the previous session.