Cotton futures settled higher Tuesday on a steady drumbeat of speculative buying and the market will be looking for news to provide it direction on its next move, analysts said. The New York Board of Trade's December cotton contract rose 0.19 cent to end at 52.51 cents a lb, ranging from 51.10 to 53.30 cents. March added 0.33 to 54.70 cents. Distant months increased 0.25 cent.
"At the end, it was trade selling and local profit-taking (which) took prices almost back to square one," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
He said the market was trying to finish above a technical target of 52.90 (cents, basis December) which could have boosted values in the days ahead.
A further advance into an area running from 53.25 to 53.45 cents, "would portend a further rally towards 54.08 (cents)," Stevens added.
In mostly technical action, the market was hit by a late flurry of trade and some speculative sales to reduce its gains on the day, dealers said.
Fundamentally, analysts said they were waiting for the releases next week of the US Department of Agriculture's monthly supply/demand report when the first detailed forecasts of the 2005/06 marketing year (August/July) become available.
The market also took note of news that government weather forecasters said this year's hurricane season will be worse than expected with as many as 21 storms and 11 hurricanes which could menace the United States.
Many states in the US cotton belt are in areas which could get hit by hurricanes during the peak period running from August to September - a time when many cotton farmers here would be getting ready for harvest.
Brokers Flanagan Trading Corp sees resistance in the December contract at 53.10 and 54 cents, with support at 52.35 and 51.85 cents.
Floor dealers said estimated volume hit 10,500 lots, compared with the previous tally of 5,165 lots. Open interest in the market fell 261 lots to 93,750 lots as of August 1.
Comments
Comments are closed.