Cotton futures finished Monday at a three-week high on chart-based speculative buying plus possible consumer buying and the market could continue higher, analysts said. The benchmark May contract on ICE Futures US rose 1.28 cents, or 1.43 percent, to end at 90.91 cents per lb, dealing from 89.36 to 91.01 cents. It was the loftiest close on the spot cotton contract since March 7.
Volume traded Monday amounted to slightly over 20,300 lots, about 15 percent under the 30-day norm, Thomson Reuters data showed. "It's holding like a rock," said Mike Stevens, independent cotton analyst based in Mandeville, Louisiana.
Technically, the market traded to within sight of the 100-day moving average about 92.65 cents and should take aim at that level in the days ahead. "The...charts are starting to turn up," said Stevens, who added that cotton will likely see some follow-through buying in the next few sessions.
Traders said any advance will probably peter out later in the week as players tweak positions before the US Agriculture Department hands out its keenly awaited potential plantings report on Friday. Another dealer said cotton futures have found solid support at 87 cents, basis May, because it is an area where mill and trade buying has shown up and propelled fibre contracts up.
Open interest, an indicator of investor exposure, rose for the 12th straight session to 190,909 lots as of March 23, the highest since February 9, ICE Futures US data showed. The CFTC report on Friday showed investors increasing their net short position in the market by 231 lots to 7,784 lots, the largest net short position in about three years. At the start of February, investors were holding a net long position in cotton of more than 14,000 lots.
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