Mike Stevens of SFS Futures in Mandeville, Louisiana, said early fund buying gave cotton a lift but trade accounts aggressively sold the market.
"While the early retreat was away from trendline resistance and an overbought situation, the market has a very firm undertone now that the correction is out of the way," he said.
Analysts said the ability of the market to stay near its current highs seems to indicate that a further advance may be in store for cotton.
"The key moving averages are converging and unless prices move lower into the end of the week those key moving averages will cross by Friday and that will signal that funds are ready to build new long positions," said a daily commentary by brokers Flanagan Trading Corp.
On the switch trade out of spot March, open interest in the contract sank 6,693 lots to 12,856 lots as of February 15.
Looking toward tomorrow's weekly US Department of Agriculture weekly export sales report, brokers said US cotton sales should range from 150,000 to 250,000 running bales (RBs, 500-lbs each), from sales last week of 454,600 RBs.
"Sales should be down this week because China and large parts of Asia were out for the (Lunar) New Year holidays," one said. "I think sales are big next week, but not this week."
The brokers said US cotton shipments of previously booked orders stood at around 200,000 to 300,000 RBs, from last week's 273,400 RBs.
Flanagan sees resistance in the March contract at 46.60 and 47.50 cents, with support at 46 and 45.35 cents.
Floor traders said final estimated volume stood at 21,000 contracts, down from Tuesday's tally of 38,550 lots. Open interest fell 110 contracts to 92,047 lots as of February 15.