US cotton futures finished up by their daily limit on Thursday as commercial and trade buying lifted the market off the previous session's three-week low. With the weekend coming up, dealers said players would be keeping a wary eye on Japan's nuclear crisis.
The key May cotton contract on ICE Futures US rose by the 7-cent limit to close at $1.9212 per lb, with the session low at $1.85. Open interest, an indicator of investment exposure, totalled 173,403 lots as of March 16, still near the lowest since late July 2010, data from ICE Futures US showed.
Volume traded stood at 17,600 lots, over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed. "The outside markets took cotton right up," said Mike Stevens, an independent analyst in Louisiana. He said the market received an initial boost from firmer Chinese cotton prices, with the September cotton contract on the Zhengzhou Commodity Exchange last done at 29,535 yuan per tonne, up 545 yuan.
The upbeat tone of outside markets aside, cotton players said they would be digesting how badly the situation in Japan eventually hits cotton demand. "There will be some hesitation in taking an aggressive position in most markets going into the weekend because there is a degree of uncertainty about what may happen in Japan," a dealer said.
Market participants will be eyeing for future direction the potential plantings report by the US Agriculture Department due on March 31. It will be the first government survey of likely plantings for major row crops such cotton, corn, soybeans and wheat in 2011. Cotton has to compete for acreage against similarly high-priced grains this year.
Comments
Comments are closed for this article.