NEW YORK, Feb 9: NY cotton futures closed with marginal gains in a choppy session with key players on both sides of the market before the release of a vital industry crop plantings report later on Friday.
March cotton rose 0.12 cent to settle at 38.26 cents a lb, trading from 37.70-38.65 cents. May gained 0.27 cent to end at 39.95 cents.
The rest of the board climbed 0.25-0.35 cent.
It was fairly well mixed,” Frank Weathersby of brokers Affinity Trading in Destin, Florida said.
The choppy action came in front of the release this Friday of the plantings survey of the National Cotton Council (NCC) at its annual meeting in Dallas, Texas.
A survey by Reuters showed most analysts expect sowings to range from 14.594-14.605 million acres, against US cotton planted acreage last year of 15.8 million acres.
Brokers said cotton operators were involved in two-sided action most of the session, with speculative and trade accounts running the market to its highs and then proceeding to sell it off from there.
Most of the major players were on both sides of the market, buying it at the lows and selling it at the highs, one analyst said.
Reaction to the monthly USDA production report was muted.
USDA lowered its forecast for US mill consumption to 7.3 million (480-lb) bales from 7.7 million last month, but raised its estimate for US cotton exports in 2001/02 to 10 million bales from 9.8 million bales.
John Flanagan, president of brokers Flanagan Trading Corp. in North Carolina, said that while the consumption data was bearish on first blush, the rate os US cotton use has improved and that is likely to be the low for the season.
Of more concern for the trade is the overwhelming approval by the US Senate of provisions in the Farm Bill to cap crop subsidies at $275,000 per farmer, 40 per cent lower than now allowed.
James Echols, NCC chairman, in a statement blasted the cap as showing a serious lack of understanding about commercial agriculture and said the Senate has used payment limits to essentially gut an otherwise good farm bill.
On a technical basis, chartists said resistance in March cotton would be at 38.50 and 39.80 cents while support is seen at the session low of 37.7 and 37.40 cents.
Estimated final volume reached 12,000 lots, against the previous 13,090 contracts. Open interest in the cotton market stood at 65,955 lots as of Thursday, up 832 contracts from the previous session.—Reuters