NEW YORK, Sept 8 (Reuters) - Cotton futures ended Thursday
at a fresh two-month high on follow-through investor buying
although profit-taking pruned the market's gains, analysts
said.
The key December cotton contract on ICE Futures U.S.
rose 3.29 cents, or almost 3 percent, to end at $1.1363 per lb,
trading from $1.1117 to $1.1547. It was the loftiest close for
cotton since July 8.
Volume on Thursday was almost 26,500 lots, the highest
amount traded since July 15, ICE Futures U.S. data showed.
The total traded would be more than double the 30-day norm,
preliminary Thomson Reuters data showed.
'We had some follow-through (buying),' said Sharon Johnson,
senior cotton analyst at commodities brokerage Penson Futures
in Atlanta, Georgia.
She said news of floods in major cotton producer Pakistan
and the announcement by top consumer China it would start
stockpiling cotton was apparently taking hold in the cotton
market.
Technically, dealers said the close over $1.13 meant cotton
may now have the momentum to grind towards areas near $1.20 and
then $1.24, basis December.
Cotton industry players said lower supplies out of China,
the world's biggest producer and consumer of cotton, Pakistan
and the U.S., the world's top cotton exporter could again stoke
a rally in fiber contracts.
Last year, floods in Pakistan and poor yields in China in
2010 provided the spark for cotton futures to kick off its
historic rally to record levels above first $1 and then $2 a
lb, levels not seen in over 150 years.
The market will now be looking toward the release of the
U.S. Agriculture Department's monthly supply/demand report on
Sept. 12, especially since most of the trade discounted the
figure for U.S. 2011/12 cotton production in the August data as
being too high.
The level of investor interest in the cotton market hit
151,107 lots as of Sept. 7, the highest level since June 14,
exchange data showed.
Traders said this meant investors are apparently trying to
build long positions in cotton because they believe it is
headed higher.
