New York cotton closes daily limit up

US cotton futures finished up the daily limit on Wednesday on another round of speculative and fund buying as players eyed release of a government sales report to gauge demand for the fibre, analysts said. The cotton market has jumped almost 20 percent since the middle of January, fuelled by robust prices in top consumer China although the Chinese are stepping away for the Lunar New Year festivities which get going next month.
The key March cotton contract on ICE Futures US rose the 5.00 cent limit to close at $1.6683 per lb, short of the new record high at $1.6789 set on Tuesday. The low for the session was at $1.6081. Total volume stood at 17,100 lots, about 5 percent below the 30-day norm, Thomson Reuters preliminary data showed. "It's more of the same - spec and fund buying," said Sharon Johnson, senior cotton analyst at brokerage Penson Futures in Atlanta, Georgia.
She said a touch of mill buying also piled into the market from laggard mills picking up some fibre. The market derived no inspiration from Chinese cotton prices. The key September cotton futures on the Zhengzhou Commodity Exchange was last done at 31,510 yuan per tonne, down 115 yuan on the day. Analysts said the market was looking toward the US Agriculture Department's weekly export sales report to get an accurate picture of demand for cotton at this time.
Cotton brokers estimate total US cotton sales between 200,000 to 300,000 running bales (RBs, 500-lbs each), against sales in last week's report of 457,500 RBs. After the sales report, the market's attention should turn toward a report on potential US 2011 cotton plantings.
The market will wait for the potential plantings survey by industry group the National Cotton Council of America. The results of the survey will be handed out at the group's annual meeting next week. A Reuters survey at the Beltwide Cotton conference this month had forecast US 2011 cotton plantings at around 12.48 million to 12.53 million acres, which would be a 5-year high and an increase of around 15 percent from last year's 11.04 million acres.