US cotton ended up a second straight session on Wednesday, underpinned by market expectations for a bullish plantings report due later in the week, traders said. Seasonal short covering by funds also helped cotton futures on the New York Board of Trade stay firmly above the technical support of 60 cents a lb - a level held since June 21.
NYBOT's key December cotton contract settled up 0.24 cent, or 0.4 percent, at 61.69 cents a lb on Wednesday, after trading between 60.65 and 62.25 cents. Since Monday's close, the contract has gained almost 0.9 cent, or 1.5 percent.
The rally comes amid trade expectations for a sizeable reduction in the acreage numbers of cotton when the US Department of Agriculture issues a scheduled plantings report on Friday.
Some industry analysts said they expect the USDA to declare a total area of 11.72 million acres under cotton, marking a reduction of about 430,000 acres from a planting intentions survey released in March.
Others saw a bigger drop. "I think the perception is we should see a further decline," said analyst Keith Brown at Keith Brown and Co in Moultrie, Georgia. "My guess is we are looking at a fall of about 700,000 acres from March, and it has not only to do with less plantings than intended but also problems associated with too much rain and flooding," he said.
The December contract on IntercontinentalExchange's NYBOT electronic cotton market was also up 0.24 cent at 61.69 cents by 3:35 pm EDT (1935 GMT). Back months on NYBOT's cotton complex closed down 0.10 cent to up 0.65 cents. Open interest fell 309 lots to 202,007 lots on Wednesday.
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