NEW YORK (Reuters) - Cotton futures settled higher Tuesday as they recovered from a three-week low, withinvestors encouraged by strength in outside markets andscattered talk of Chinese offtake, brokers said.
ICE Futures U.S. benchmark December cotton contract
It had ended on Monday at 97.83 cents, the lowest finishfor the second position contract since the middle ofSeptember.
The contract traded from 96.90 to $1.004, rising above$1/lb for the first time since last week.
Volume traded reached 14,284 lots by 2:34 p.m. EDT (1834GMT), nearly 20 percent below the 30-day average at 17,284lots, preliminary Thomson Reuters data showed.
"I think it's the weak dollar and all the outside marketstuff," Mike Stevens, an independent cotton analyst inMandeville, Louisiana, said of the reasons for cotton's gain.
He said cotton would have lost ground if not for thesupport derived from investors who bought the commodity complexacross the board.
Another source of support came from talk of consumer buyingby some Chinese mills, Bill Raffety, an analyst for commoditiesfutures brokerage Penson GHCO, said. The buying took place eventhough the Chinese are on holiday until Oct. 7.
Cotton climbed more than 33 percent in the third quarter of2010, its best quarterly performance since 1994, ThomsonReuters data showed.
Broker Flanagan Trading Corp sees resistance in theDecember cotton contract at 98.65 and 99.50 cents, with supportat 97 and 95.80 cents.
Volume traded on Monday reached 28,039 lots, from the priortally of 20,034 lots, data from ICE Futures U.S. said.
