Strong demand for US cotton amid lower supply of high grades, the pink bollworm infestation that has affected the crop-size in India, and buying by funds are among the factors supporting high cotton prices, said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. Cotton futures marked a 3-1/2-year high of 79.45 cents a lb. last week.
"Producers remain limited sellers at best. Ideas are that prices can remain generally strong. Mills are caught unpriced on a lot of purchases and the market knows this," Jack Scoville, vice president with Price Futures Group in Chicago, said in a note. With a lower international price from the previous season and the rising price of competing fibers, global consumption is expected to grow, the International Cotton Advisory Committee (ICAC) said on Tuesday.
Total futures market volume fell by 8,023 to 22,702 lots. Data showed total open interest gained 312 to 283,001 contracts in the previous session.