NEW YORK, Dec 8: Cotton futures finished higher Friday on late speculative fund buying as most players sat back to wait for release of a government crop report next week, brokers said.

ICE Futures open-outcry March cotton contract surged 0.77 cent to close at 64.55 cents per lb, trading between 63.80 and 64.70 cents. May gained the same to 66.13 cents.

Back months increased 0.55 to 1.00 cent.

The ICE March electronic cotton contract was up 0.97 cent to 64.75 cents at 3:07 p.m. EST (2007 GMT).

Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the solid finish by the March contract over 64.40 cents meant you put a nail in the bears’ coffin and confirmed that a low in the market is in place around 63 cents.

Cotton popped higher at the start, sagged to probe the session lows where it ran into trade support and used a late buying spree by speculative funds to move higher into the close of business, dealers said.

Leads remained scant for most of the session as investors appeared to be content to tweak positions before Tuesday’s release of the US Agriculture Department’s monthly supply/demand report.

Most analysts expect the USDA to raise its estimate of the US 2007/08 cotton harvest after ideal growing weather in the prime growing state of Texas among others.

The trade though is worried that a global credit crunch, surging crude prices and attempts by top consumer China to curb inflation may conspire to undermine world cotton demand.

Sharon Johnson, cotton expert for First Capitol Group, said in a report a combination of high energy prices, (the) US-driven credit crunch, disparity among currencies...are all having a negative impact on world usage. Brokers Flanagan Trading Corp. sees resistance in the March open-outcry cotton contract at 65.20 cents, with support at 63.70 and 62.85 cents.

Open-outcry cotton volume Thursday was at 2,760 lots and screen trade at 12,607 lots. Open interest in the market rose 460 lots to 210,839 lots as of Dec. 6, according to exchange data.

— Reuters