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Cotton slightly firmer

NEW YORK: NYCE cotton futures were slightly firmer on speculative buying in midday trade, but prices are unlikely to continue their two-week rally, market sources said.

Several sources noted a widening of the May/July spread, and a heavily-weighted long position by the speculators. The so-called spec/hedge report will be released Wednesday.

"Unless we get some extremely bullish news, I don't see any way we can do anything but go down," said Sharon Johnson, an analyst with Frank Schneider and Co Inc.

She added that the May/July spread was around 140 points, and "would not inspire a rally as it continues to widen out."

Reports of unrelenting rain in Argentina, and heavy rains throughout the Southeast which have delayed the harvest in some states, are lending support to prices, market sources said.

Meanwhile, prices for the new crop will have to rise so that growers are not enticed by record-high prices for corn and wheat, one Texas-based trader said.

At 1204 EDT, May cotton was up 0.31 cent to 86.30 cents a lb, having ranged from 86.75 and 85.90 cents a lb. December was 0.20 cent firmer at 81.40.-Reuter