Cotton futures gained on 13 November on short-covering in heavy trading as the index fund roll neared its conclusion and mill buying under the market continued to underpin prices. The most-active March cotton contract on ICE Futures US closed up 0.5%, to settle at US cents 78.59 per pound, up for a second straight session. Meanwhile, spot December contract edged up 0.1% to US cents 77.97 per pound.
On the day, prices moved in a tight range while trading volumes were heavy, but were down from the previous day when spread-related dealings lifted spot prices as much as 1.9 percent and traders scrambled to cover short positions amid the fund roll.
The US dollar eased against a basket of currencies, buoying dollar-traded commodities as it made them less expensive to holders of other currencies.
Reports state that China may begin sales from its massive state reserves as early as this week. Dealers were eagerly awaiting the announcement from Beijing, as the price set for the sales will determine the floor for global cotton prices and for import demand in the world's top consumer.
The beginning of sales may provide clearer direction for the market, which has stabilized in recent past after rumors the reserves would soon unleash its stocks pressured prices to the weakest levels since January. China's stockpiling program has led to voracious demand for low-priced overseas fiber, establishing a floor for the global market.
A weekly US government data released on 12 November showed the crop in the world's top exporter is well behind last year's in development after weather-related planting and growing delays earlier in the season.
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