NYCE cotton futures finished slightly higher Wednesday as modest speculative buying gave fibre contracts a boost, and analysts said the market appeared poised to move up in the days ahead.
May cotton gained 0.31 cent to end at 66.10 cents a lb, ranging from 65 to 66.40 cents. July added 0.57 to 67.47 cents. Except for two contracts, back months increased 0.58 to 0.73 cent.
"It's spec buying, but it's not been real heavy," said Jobe Moss of merchants and brokers MCM Inc in Lubbock, Texas.
The market gapped down to its lows for the day at the start of trade, but the small speculators covered from there and drove fibre contracts to their highs for the session, analysts said.
Moss said some light trade sales trimmed the market's gains, but the overall tone was quiet going into the close of business.
Looking ahead to the weekly USDA export sales report, cotton brokers said US net upland cotton sales will likely range from 200,000 to 400,000 running bales (RBs, 500-lbs each), versus 106,700 RBs in last week's report, mainly after prices slid to an 11-week low earlier in the month.
"I think the sales are closer to 200,000 to 250,000 because the volume of activity in New York (cotton market) does not seem to suggest that sales were really that large," said a broker in the south-eastern United States.
The USDA data will be released on Thursday at 8:30 am EST (1330 GMT).
Even if sales are at the lower end of trade estimates, dealers said the pace is still running at a level that will enable US exporters to hit the USDA forecast that cotton exports in 2003/04 (August/July) would reach 13.8 million (480-lb) bales.
Cotton shipments of previously booked orders will remain steady, with brokers saying it should range from 290,000 to 330,000 RBs versus shipments last week of 316,400 RBs.
Technicians said resistance for the May contract was at 66.30 and 66.80 cents. Support was at 66 and 65.60 cents.
Floor traders said estimated final volume reached 8,000 lots, from the prior count of 7,002 lots. Open interest in the cotton market fell 455 lots to 86,529 lots as of March 16.
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