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NY cotton futures firmer on technical rally

NEW YORK: NYCE cotton futures on Thursday closed higher on speculative and fund buying, with the most active contract closing at its highest level since last October on a continuous weekly chart basis.

"It's the best rally we have had for months, but it was mostly a technical based rally with spec and fund buying, and excellent trade selling," said Sharon Johnson, an analyst with Frank Schneider and Co Inc.

May cotton settled 1.75 cents higher at 87.55 cents a lb, traded 88.40 to 86.10 cents. It was the highest close for a most active contract since a 90.30 cents settlement on October 6 last year.

Although the rally was mainly prompted by the charts, Johnson said there were concerns about wetness in Argentina just before the harvest. "That may affect the quality of the crop," she said.

There was good producer selling partly because the base price for cotton was higher, therefore merchants did not need to add on so much of a premium to persuade producers to sell, Johnson added.-Reuter