Cotton futures closed mostly higher Monday due to a steady round of speculative fund buying while trade expectations of robust demand from China kept the market's tone firm, brokers said.
The New York Board of Trade's key March cotton contract rose 0.24 cent to finish at 57.19 cents a lb, trading from 56.90 to 57.30 cents. It was an inside day since the range was within Friday's 56.79 to 57.45 cents band. May added 0.12 to 58.54 cents.
The rest ranged from 0.08 cent up to 0.05 cent easier.
Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said speculative fund accounts kept piling into cotton and the bullish tone was helped along by the strong demand from China, the world's leading consumer of cotton.
"China is driving the truck and we're going along for the ride," said Brown, adding producers have largely backed off to see how far high cotton prices can go.
Pension, insurance, hedge fund and other investors have poured billions into commodities, and some analysts feel cotton is beginning to get attraction from funds who feel prices can only firm in the weeks ahead.
Futures edged higher from the opening bell on speculative fund buying while some other players proceeded to transfer their long positions in the May contract into the back months, dealers said.
"The specs just kept piling although you had pretty good trade sales every point on the way up," one said. Analysts said the market may hover around its current level until a pair of government reports are released on Thursday.
The first would be the monthly supply/demand data from the US Department of Agriculture and the other is the weekly USDA export sales report. "We'll take a look at those and go from there," a trader said.
Brokers Flanagan Trading Corp see resistance in the March contract at 57.80 and 58.15 cents, with support at 57.15 and 56.30 cents. Floor dealers said final trading volume was estimated at 19,000 lots, from the previous count of 19,213 lots. Open interest rose 3,055 lots to 135,034 lots as of February 3.