NEW YORK, July 27 (Reuters) - Cotton futures finished
higher Wednesday on follow-through investment fund and
speculative buying, with traders saying the momentum from the
advance may shove fiber contracts up the rest of the week.
The key December cotton futures on ICE Futures U.S.
rose 2.85 cents or by nearly 3.0 percent to finish at $1.0361
per lb, on the heels of a 4.1 percent gain on Tuesday.
It traded from from 99.85 cents to a high of $1.0444, its
highest prices since gapping lower between July 14 and 15.
Total market volume hit almost 15,000 lots at 3:16 p.m. EDT
(1816 GMT), around 7 percent below the 30-day norm, Thomson
Reuters preliminary data showed.
'We're just building on yesterday's gains,' said Sharon
Johnson, senior cotton analyst for commodities brokerage Penson
Futures in Atlanta, Georgia.
Trade buying at the Tuesday low of 93.20 cents and
speculative fund buying on the way up was extended into
Wednesday's session, dealers said.
Independent cotton analyst Mike Stevens said in a report
that cotton futures, basis the key December contract, 'still
needs to close above $1.0446 (per lb) to generate a test of
$1.0888' which is the area from which the market had broken
down recently.
Traders said they were also carefully monitoring the
formation of a storm in the Gulf of Mexico as computer models
point to it heading toward southern Texas later in the week.
Cotton farms in the southern coastal bend of Texas, the
biggest cotton growing area in the country, are about to begin
harvesting their crop in August.
A storm at this time is particularly unwelcome because
cotton bolls are open and quality may take a hit if they get
drenched in torrential rain. The crop is the most heavily
irrigated in a state reeling from one of the worst droughts in
Texas history.
Volume traded Tuesday reached 20,136 lots, the highest
since July 18, and against the Monday volume of 8,999 lots,
which was the lowest level since July 1, ICE Futures U.S. data
showed.
Open interest in the cotton market stood at 138,911 lots as
of Tuesday, which is also the highest level since July 8, the
exchange data added.
