Volume traded in the March contract hit 8,196 lots at 2:39 pm EST (1939 GMT). "We've got some bottom picking and ... increased mill business," said Sharon Johnson, cotton expert at First Capitol Group in Atlanta, Georgia.
The recovery though has to be taken in its proper context since fiber contracts have shed over 6.00 cents the past few sessions. Direction in the market will come, as usual, from the dollar and outside markets, analysts said. Johnson does not believe a test of 70 cents is looming, but a break below that level would mean a fall in cotton to 68 or even 67 cents.
The market will be waiting for Friday's release of the US Agriculture Department's weekly export sales report. The report is normally released Thursday, but was delayed by the Martin Luther King Jr. holiday this week. Cotton brokers said they expected US cotton sales to range from 200,000 to 300,000 running bales (RBs, 500-lbs each), from 440,700 RBs in the last USDA data. Most analysts have an even narrower range of 200,000 to 250,000 RBs. US cotton export shipments are seen ranging from 200,000 to 250,000 RBs, versus 203,400 RBs in last week's report.
"We need to start seeing the pace of shipments pick up. That should get going around this time of the year," a broker said. Brokers Flanagan Trading Corp sees resistance in the March contract was at 72.85 and 74.05 cents, with support at 71.05 and 70.35 cents. Total volume traded Wednesday hit 19,483 lots, against the previous 15,229 lots, according to data from ICE Futures US Open interest stood at 173,958 lots as of January 20, from the prior count of 177,032 lots, the exchange said.