NEW YORK, March 17: Cotton futures closed higher Friday on speculative fund buying as the trade digested an estimate by an analytical firm on likely US 2007 cotton plantings, brokers said.

The New York Board of Trade's May cotton contract rose 0.47 cent to finish at 53.91 cents per lb, moving from 53.31 to 54.25 cents. July added 0.38 to 54.64 cents.

The IntercontinentalExchange's NYBOT electronic market for cotton showed the May contract gain 0.53 cent to 53.97 cents at 2:26 p.m. EDT (1826 GMT), moving from 53.29 to 54.22 cents.

Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said fiber contracts managed to hold the lows for the day and this prompted speculators to begin covering positions in the market.

Once the key May contract raced past the recent highs of 53.80/85 cents, automatic buy orders were triggered. Cotton was then capped by trade sales at the top of the range.

Stevens believes cotton will try to establish a wide 2.00-cents band between the lower reaches of 53 and near 55 cents while waiting for the critical US Agriculture Department's potential plantings report on March 30.

The market took note of news Memphis-based analytical firm Informa Economics was said to have forecast US 2007 cotton plantings at 12.86 million acres, trade sources said Friday.

Informa officials were not available to comment on the estimates. The figure is sharply below last year's US cotton plantings of 15.276 million acres.

The Informa figure is below the estimate by industry group National Cotton Council of 13.2 million acres, but this was based on a survey conducted in December 2006.

In a recent industry conference, major merchant Allenberg was said to have pegged US cotton sowings at 12.5 million acres and the Ag Market Network's conference call for producers forecast plantings at 12.231 million acres.

Analysts have said that a sizzling rally in corn prices from late in 2006 and into 2007 would lead to a sharp decline in US cotton plantings.

Informa was also said to have pegged US corn sowings at 87.834 million acres, from 78.3 million in 2006.

Broker Flanagan Trading Corp. sees resistance in May cotton at 54.35 and 54.90 cents, with support at 53.75 and 53.30 cents. —Reuters