NEW YORK, Jan 14: Cotton futures finished higher Friday on steady speculative buying, and the market is poised to keep working higher after a holiday weekend, brokers said.

The cotton market will be closed Monday to honour slain US civil rights leader Martin Luther King Jr. Trading reopens on Tuesday.

The New York Board of Trade’s key March cotton contract climbed 0.49 cent to finish at 55.93 cents a lb, ranging from 55.20 to 55.95 cents. May gained the same to 57.07 cents. One contract aside, the rest rose 0.30 to 0.55 cent.

Bill Raffety, an analyst for futures brokerage RJ O’Brien, said that since the average world price (AWP) for cotton now stands above 56 cents, the market is heading higher to match that figure.

As AWP rises, trade support and resistance moves right along with it, added Mike Stevens of brokers SFS Futures in Mandeville, Louisiana. He said the AWP now stands at 56.15 cents, in the middle of a technical gap the market may fill of 56 to 56.30 cents, basis the March contract.

Fundamentally, the trade is monitoring the pace of Chinese demand which is seen picking up ahead of the Lunar New Year at the end of January.

Remembering that the 2005 Texas record (cotton) yield and production was based on near record subsoil moisture, there is and should be a growing concern surrounding 2006 Texas and US production, said the weekly marketing note of analyst O.A. Cleveland.

Futures slipped at the start, but speculative buying gradually hoisted the market higher although spot March stopped just in front of the 56-cent level, dealers said.

Cleveland said the market is making for 59 cents, but there is still a lot of wood to chop before the technically heavy 56-cent barrier can be crossed.

Brokers Flanagan Trading Corp. pegs resistance in the March contract at 56.30 and 57.15 cents, with support at 55.65 and 55.10 cents.

Floor dealers said final trading volume was estimated at 15,000 lots, down from Thursday’s count of 12,688 lots.—Reuters