Cotton futures gained for a second straight session on Friday, amid a broad rally in commodities and equities markets, rising further from a more than 6-1/2-year low struck on Thursday. Prices still finished the week lower. "Even though speculators continued to lean on the short side, the market has shown a propensity to rebound, which is setting it up for a move higher," Peter Egli, director of risk management at British merchant Plexus Cotton, said in a note.
The cotton market is "breaking a downtrend line," which could increase short covering, said Michael McDougall, director of commodities for Societe Generale in New York, adding that a break above the 57.90 cent per lb mark could signal a test of the 60 cent level. The May contract on ICE Futures US settled up 0.32 cent, or 0.56 percent - the biggest intra-day percentage gain in a week - at 57.15 cents per lb, after trading as high as 57.45 cents. The contract fell about 3 percent this week. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.95 percent.