NEW YORK, July 31: NY cotton futures reversed course to close higher Tuesday on light local and speculative buying, with operators uncertain about the market’s next move going into the last trading day of the month on Wednesday.

Key December cotton rose 1.85 cents to close at 48.60 cents a lb, near the top of its 46.57-48.70 trading band. Monday, the contract lost 0.68 to end at 46.75 cents. March gained 1.70 cents to 50.30 cents, with the back months up 1.70-1.85 cents.

There’s not much volume behind the run-up today, said Sharon Johnson, cotton expert at Frank Schneider and Co. Inc. We rebounded basically on air.

Cotton retreated shortly after the start of business on follow-through sales, but speculative and local accounts opted to run the market in the opposite direction when it failed to uncover downside stops, brokers said.

Some bullish options strategies were also implemented by a major merchant based in the US Southeast.

The specs and the locals gave it a boost, but there was almost nothing behind the move since there was a lack of interest in selling the market at the top of the range, a dealer said.

Some trade selling began to emerge when December punched its way past 48 cents, traders said.

On another matter, market operators took note of news that the weekly New York Board of Trade (NYBOT) spec/hedge report showed the funds holding a net long position of 43.9 per cent and against a net long position of 44.8 per cent in last week’s data.

The weekly USDA crop weather summary issued by the National Agricultural Statistics Service said widespread showers boosted soil moisture reserves across much of the Southeast although parts of the southern Atlantic Coastal Plain remained abnormally dry.

In Texas, irrigated fields responded favorably to above-normal temperatures, while dryland fields wilted under the afternoon heat, it said.

Technicians believe resistance in the December cotton contract remains at 49, 49.50 and 50 cents. Support is seen at 46 and 45.35 cents.

Estimated final volume touched 8,000 lots versus Monday’s count of 3,307 lots. Open interest in the cotton market fell 209 lots to 75,122 lots as of July 29.—Reuters