December 8, 2001	Saturday	Ramazan 22, 1422

NEW YORK, Dec 7: NY cotton futures settled at a three-month peak as fund buying returned in force to the market, abruptly ending a three-day correction seen in fiber futures.

Benchmark March cotton rose 1.15 cents to settle at 37.93 cents a lb, trading 36.81 to 38.30 cents. It was the best close for cotton on a spot basis since Sept. 5, 2001 when the then front contract closed at 38.25 cents.

May surged 1.08 cents to end at 39.21 cents. Distant months soared 1.10-1.25 cents.

We’re just jumping back up some (because) we had been down three days, Sharon Johnson, cotton expert of Frank Schneider and Co. Inc. in Atlanta, said. The funds came in for another round of buying.

Analysts said higher-than-expected US cotton sales in the weekly USDA export data and a steady Cotlook A Index, used by the trade as an indicator of global cotton demand, spurred renewed buying in the market.

The A Index was quoted unchanged at 42.70 cents.

The USDA weekly sales data showed new upland cotton sales hitting 287,300 (480-lb) bales, sharply higher than trade expectations it would range from 140,000-170,000 bales.

Shipments also touched a robust 187,100 bales, some 22 per cent higher than in the previous week and 20 per cent above the four-week average. The trade had forecast it at 140,000-160,000 bales.

Futures have taken a breather as it rallied toward the end of last week as cotton rebounded from the near 30-year lows it posted last October, when the then spot December cotton contract tumbled to a lifetime low of 28.20 cents.

Fund buying hoisted futures after the market opened for business before trade selling capped futures, especially at 38 cents, basis March, dealers said.

Mike Stevens of Swiss Financial Services in Mandeville, Louisiana said fund buying kicked in going into the close but the trade was again waiting for the market above 38 cents, basis March.

Technicians said resistance in the March cotton contract would be at 38.50 and 39 cents whilst support is seen at 36.40 and 36 cents.

Estimated final volume traded reached some 11,500 lots against the previous 6,635 lots.—Reuters