NEW YORK, June 17 (Reuters) - U.S. cotton futures finished
higher Friday, recovering from a three-week low on
short-covering stemming from worries about one of the worst
droughts in the history of growing areas of Texas.
The market shrugged off a two-day selling spree sparked by
fears of a Greek default in the euro zone as players were wary
of going home short in cotton with the weekend coming up.
The key December cotton contract on ICE Futures U.S.
rose 3.59 cents to finish at $1.2377 per lb, ranging from
$1.1787 to $1.2462. On Thursday, the contract closed at $1.2018
in the lowest finish for the third position cotton contract in
nearly three weeks.
On the week, the market was down 7.39 percent.
Total volume traded Thursday reached nearly 11,100 lots at
2:50 p.m. EDT (1850 GMT), some 40 percent below the 30-day
norm, Thomson Reuters preliminary data showed.
'They're (investors) buying it off the drought in Texas,'
said Jobe Moss, an analyst for brokers and merchants MCM Inc in
Lubbock, Texas.
Traders said the investors who dumped cotton at the height
of the euro zone induced sell-off flocked back into the market
and reestablished their positions in cotton.
Stocks and the euro rose Friday after the leaders of France
and Germany hinted at an aid deal to save Greece from default,
but investors remained on edge until a deal is reached.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ National Drought Mitigation Center map: http://www.drought.unl.edu/dm/monitor.html Drought hit-Texas could see cotton plantings hit in 2011: http://r.reuters.com/cyq79r <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ The weather forecast for Texas calls for more dry and hot weather through the weekend and into Tuesday with temperatures on Saturday expected to peak at 107 degrees Fahrenheit (42 Celsius), a report by forecaster Telvent DTN said. Aside from Texas, traders are also mulling how much damage was done to cotton in Georgia, the second biggest producing state, and the floods which struck several southern U.S. states along the Mississippi river.
