NEW YORK, Dec 21 (Reuters) - U.S. cotton futures closed at
an all-time high on Tuesday as the market rose the daily limit
for the second straight session, driven by speculative buying
and tight supplies of the fiber, analysts said.
The key March cotton contract on ICE Futures U.S.
increased the 5.00 cents limit to finish at $1.5912 per lb, a
new record top for cotton as the market traded at its highest
level since the U.S. Civil War.
Since trading around $1.10 on Nov. 23, cotton futures have
increased almost 45 percent as tight supplies and strong mill
demand rekindled its rally.
Cotton is the best performing commodity in the
Reuters-Jefferies commodity index, up almost 90 percent year to
date.
(Graphic: http://link.reuters.com/kew48n)
The volume of business though was below the norm. Total
volume traded was around 21,500 lots, about a third below the
30-day average at 31,000 lots, Thomson Reuters preliminary data
showed.
'It was just more panic buying,' said Mike Stevens, an
independent cotton analyst in Mandeville, Louisiana.
'The demand is still there,' adding the rally was expected
by most players because most of the cotton from the United
States, the world's top exporter, has already been sold.
Firmer cotton prices in China, the world's leading
consumer, likely boosted U.S. cotton values as well, dealers
said.
The May cotton contract on the Zhengzhou Commodity
Exchange was last traded 555 yuan higher on the day at 28,905
yuan per tonne.
Trading in cotton options was halted for the second day in
a row after contracts in that market rose twice the daily
limit, ICE Futures U.S. said.
Traders said the cotton market's level of business would
remain modest with the Christmas and New Year holidays coming
up. The market will be closed on Friday for Christmas, with
business resuming on Monday.