NEW YORK, Nov 10 (Reuters) - Cotton futures settled higher Thursday on
investor buying sparked mainly by news that China bought a large amount of
cotton to replenish official stocks, analysts said.
The key December cotton contract on ICE Futures U.S. increased
2.32 cents or by 2.4 percent to finish at 99.50 cents per lb, moving from
96.81 to $1.0078.
Total volume traded Thursday hit around 38,400 lots, which would be the
highest since early June and more than double the 30-day norm, preliminary
Thomson Reuters data and ICE Futures U.S. data showed.
'The Chinese are buying,' Ron Lawson, senior cotton analyst at
brokerage logicadvisors.com in Sonoma, California, said.
He said the Chinese apparently need to buy cotton to replenish state
stocks and that the central government has made the decision to sow more
grains than cotton.
The U.S. Agriculture Department said China bought 998,000 running bales
(RBs, 500-lbs each).
Independent analyst Mike Stevens in Louisiana said cotton futures began
surging ahead of the release of the report.
The market digested news of Noble Group posting its first quarterly
loss in a decade, part of which was blamed by analysts on cotton market
losses.
This has followed U.S. agribusiness and trading giant Cargill Inc , the
world's 2nd largest cotton trader, posting a 66 percent drop
in quarterly profit, but did not specifically blame cotton.
On a technical level, dealers said the upside target would be $1.04 and
the downside target at 95.78 cents for December delivery.
Analysts said followers of index funds also continued to roll positions
out of the December contract before it goes into first notice day for
deliveries later in the month.
Open interest in cotton, usually taken as an indicator of investor
exposure in cotton, stood at 168,672 lots as of Nov 9 against 165,589 lots
as of Nov. 8, exchange data showed.
Total volume traded Wednesday came to 29,387 contracts versus the prior
session's 36,055 lots which had marked the highest level traded since June
10, ICE futures U.S. data said.
