The key March cotton futures on ICE Futures US gained 0.77 cent to settle at 99.37 cents per lb, dealing from 98.06 to 99.44 cents. The contract built on an uptrend that began at the 17-month low hit on Dec. 14.
“It’s holding in here like a rock. The market continues to chew its way up to the near-term of $1.02,” said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.
Cotton’s strength was bolstered by news coming from China, the world’s leading consumer of cotton for its textile and apparel industry.
Stevens said in a report that “the rate of China’s GDP, robust retail sales and factory output plus expectations that China’s planted acreage will fall next season all contributed to bullish attitudes.”
Volume traded on Monday reached almost 17,300 lots, over 15 percent above the 30-day norm, according to Thomson Reuters data.
Analysts said business may slow down this week as the Chinese celebrate their New Year.
Other technical resistance targets for the March cotton contract loom at 99.95 cents a lb, and then though the key $1 psychological level and then $1.02.
A close in the March contract below Tuesday’s low of 95.67 cents would likely lead to further losses leading down to 94, then 91 cents, analysts said.
Cotton’s open interest – an indicator of investor exposure – stood at 158,439 lots as of Jan. 20 versus 157,614 lots on Jan. 19, the exchange said.