--- Volumes light ahead of Christmas holiday
--- Prices rise for 4th straight week
Volumes were low though, with just less than 8,000 lots of March contracts traded on the day. Fibres gained for a fourth straight week, with the 1.5-percent rise fuelled by a fresh wave of speculative interest. Reflecting the extent of the spec buying, the latest data showed that noncommercial dealers doubled their net long position in fibres for the second straight week in the week to December 18.
That took bullish bets to their highest level in more than a year, US Commodity Futures Trading Commission data showed on Friday. Little in the bearish outlook has changed, but renewed spec interest coincided with the market's break out of a six-week long narrow trading range. A neutral monthly crop report from the US government on December 11 appeared to be the trigger for the buying.
On charts, fibres approached oversold levels. Its relative strength index (RSI) reading was at 66 on Friday, its highest since October 18 and close to 70, which is often seen as oversold. "With the end of the week, month and year approaching, many traders are more likely to take profits and reduce exposure," said Sharon Johnson, cotton specialist at Knight Futures.
Year-to-date, cotton prices are down 17 percent, a further retreat after last year's 36-percent plunge. Fibres outperformed the broader commodity market, which was hit by selling after US Republican lawmakers withheld support for a proposal to avert the so-called fiscal cliff. Volumes will remain light next week with a shortened trading session on Monday and markets shut on Tuesday for the Christmas holiday.