Cotton contracts for December settled up 0.48 cent, or 0.71 percent, at 67.71 cents per lb, registering its biggest percentage gain since June 1. It traded within a range of 67.1 and 68.13 cents a lb. Prices touched a near 10-month low of 66.15 cents in the previous session. The price action is "giving off indications that an interim low may finally be in place," Jobe Moss, a broker with MCM Inc in Lubbock, Texas, wrote in a note.
"However, the only fly in the ointment is the lack of trading volume." Total futures market volume fell by 4,190 to 17,865 lots. Data showed total open interest gained 1,263 to 200,519 contracts in the previous session. For the week ending June 25, US Department of Agriculture had rated 57 percent of the US crop in good or excellent condition, off 4 percentage points from the previous week. Cotton rated in poor, or worse condition was estimated at 10 percent.
"The 2017-2018 crop is yet to have any significant issues globally, which has led to steadily increasing projections for world output over the last few months," Gabriel Crivorot, analyst at Societe Generale in New York said in a note. "One of the main factors that prompted such large planted areas, Chinese demand, has been flagging for the last few months. Funds are likely looking for a negative supply shock or for rebounding demand from Southeast Asia, which would be reflected in US export sales.