NEW YORK, July 19: NY cotton futures settled higher on Friday as fiber contracts broke a 3-day losing streak on very light buying by the trade and small speculators, analysts said.

December rose 1.07 cents to end at 61.41 cents a lb, trading 60.22-61.50 cents. The rest added 0.80-1.20 cents.

We’ve been down pretty good the past three days, Sharon Johnson, cotton expert for Frank Schneider and and Co. Inc. in Atlanta, said to explain why futures snapped back to post a modest gain.

Futures gapped down to lows for the day on follow-through commission-house sales, but the trade buying stabilized the market, brokers said. Speculative buying then ran the market to its session highs.

Analysts said cotton will be looking for direction next week since there were still some questions on the maturing US cotton crop.

The market greeted the speech by influential US cotton merchant William Dunavant Jr., chief executive of Dunavant Enterprises in muted fashion.

Dunavant told an AgMarket teleconference he expected the December cotton contract to trade from as low as 57 cents to a peak of 73 cents, with the high being reached just after New Year’s day of 2004.

Dunavant painted a mostly friendly scenario for the cotton market, saying US cotton exports could rise to a record 12 million (480-lb) bales in 2003/04 and predicting a fall in world cotton ending stocks to 33.6 million bales.

But he added that improved farm conditions would likely mean US cotton output reaching 16.8-16.9 million bales, up from the USDA estimate of 16.6 million.

Finally, Dunavant said that the outlook for the US textile industry currently suffering from heavy amounts of Chinese textile exports is bleak without help from Washington.

Technicians see resistance in the December contract at 62.04 and 62.75 cents, with support at 60.90 and 60.40 cents.

Final volume reached around 2,500 lots, against the prior tally of 6,882 lots. Total open interest in the cotton market fell 357 lots to 64,048 lots as of July 17. —Reuters