By Carole Vaporean
NEW YORK, July 2 (Reuters) - Cotton futures closed strong on
Monday, advancing with grain markets and building on last week's
technical strength to post a 12-day high, despite the lack of
cotton related news.
"The technicals were looking so good and today was a proving
day, because it went down to right around 70, tested it, and
came back to close above 72 (cents) and stand on its own two
feet," said Mike Stevens, a veteran cotton analyst in
Mandeville, Louisiana.
He added that some players bought cotton along with grains,
which have been rallying amid a deepening drought across
much of the U.S. Corn Belt.
Benchmark December cotton on ICE Futures U.S. rose
0.97 percent, or 0.69 cents, to end at 72.02 cents per lb, its
highest since June 20.
December volume was 10,259 lots and makes up the bulk of the
total business for the cotton board.
Cotton was bought with grains, with U.S. corn futures
surging to 9-1/2 month peak on Monday as a worsening drought in
the U.S. Midwest severely stressed crops as they pollinated, a
critical stage of development which, if inhibited, can result in
sharply reduced yields.
Soybeans rose to their highest point in nearly four years
on a continuous chart, propelled by strong export demand and the
stressful U.S. weather. And wheat jumped to a 9-1/2 month high,
buoyed by its own tightening supply balance.
On technical charts, cotton had been traveling in a sideways
range between 67 cents and 70.50 cents. Its break above that
range on Friday put it in a strong technical position.
U.S. cotton futures jumped through their week-long range
resistance on Friday, ending a dreary quarter with healthy gains
and setting up for a further advance in the week ahead.
Its continued rally on Monday added to its bullish technical
picture, analysts said.
"Closing above 72 cents is extremely encouraging evidence
for it's building a strong base," Stevens said.
Friday's official volume was healthy at 17,613 lots, up from
16,396 lots on Thursday, ICE Futures U.S. data showed.
Open interest in the cotton market, an indicator of investor
exposure, fell to 166,490 lots as of June 29 from 166,598 lots
previously, exchange data showed.