NEW YORK, Nov 15: NY cotton futures settled near session highs on Friday on scattered buying sparked by a bullish weekly USDA cotton export sales report, dealers said.

December cotton rose 0.89 cent to 74.90 cents a lb, ranging between 73.00-75.10 cents. Most active March went up 1.09 to 79.05 cents, trading from 77.15-79.15 cents. Distant months were flat to 1.05 cents firmer.

Alan Feild of iamhedged.com in Memphis, Tennessee, said activity in the market continued to be extremely volatile even though intraday volume was light, with bullish USDA data released before the opening ultimately propping up prices.

Feild said that floor brokers often initiate selling after the release of export sales reports, so the fact that we not getting slammed here I think shows a lot of strength.

Friday, the US Department of Agriculture said cotton weekly net upland sales surged to 448,800 running bales (RB), up from 275,800 RBs in last week’s report, with China the biggest buyer at 231,900 RBs.

USDA said cotton shipments reached 185,900 RBs.

Chinese demand for cotton is strong. Since the start of the 2003/04 marketing year (August/July), the Chinese have bought 2.765 million RBs of cotton from the United States alone.

USDA, in its November supply/demand report, pegged Chinese cotton imports in 2003/04 at 7.0 million (480-lb) bales.

Mike Stevens of Swiss Financial Services in Mandeville, Louisiana, said dealings in cotton Friday were thin enough to exaggerate the directional moves.

The exception to the muted volumes was Dec/March switches, however, as players were getting out of their December positions before first notice day next week.

Open interest in December fell 5,079 lots to 14,019 lots as of Nov 13 while interest in March rose 2,882 to 63,700 lots.

Overall, Stevens said good export demand was waiting down below to support futures, although they did risk some speculative selling at higher levels on technical considerations.

Floor dealers said estimated final volume reached 9,534 lots, from the previous count of 24,212 lots. Open interest in cotton fell 2,139 lots to 98,904 lots as of November 14.

Dealers said support in the December contract would be at 74.30, 73.80 and 73 cents, with resistance at 75.25 cents.—Reuters