* Market springs up on investor short-covering
* Strong grains, outside markets stoke cotton advance
NEW YORK, Feb 28 (Reuters) - Cotton futures finished
higher Tuesday on investor short-covering fueled by a surge in
the grains complex, strong financial markets and a weaker
dollar, analysts said.
Benchmark May cotton on ICE Futures U.S. went up 1.57
cents to finish at 92.24 cents per lb, trading from 90.75 to
92.74 cents. The market was well supported above last week's low
near 89 cents.
Volume traded Tuesday was around 12,400 lots, preliminary
Thomson Reuters data showed.
"I think its short-covering at the end of the month," said
Keith Brown, president of commodity firm Keith Brown and Co. in
Moutlrie, Georgia.
The softer dollar, the "positive grains markets," and
oversold fiber contracts likely inspired players to buy cotton,
he added.
But Brown cautioned that cotton is facing a situation where
production in the upcoming 2012/13 season could run ahead of
demand.
"Cotton has a lot of demons, fundamentally and technically,"
he said.
The market will be looking toward the release on Thursday of
the weekly export sales report to gauge if fiber demand will
remain robust.
Last week, the U.S. Agriculture Department showed weekly
cotton export sales of 185,200 running bales (RBs, 500-lbs
each). Cotton export shipments were robust at 326,200 RBs, which
exceeds the average amount needed to meet USDA's current
projections for the 2011/12 crop year.
Open interest in cotton, an indicator of investor exposure,
rose slightly to 171,132 lots as of Feb. 27 from the previous
session's 171,093 lots, ICE Futures U.S. data showed.