COMMODITIES : Cotton Futures Hit Limit in Technical Rally
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Cotton futures prices soared the limit allowed for daily trading Wednesday in a technically inspired rally that lifted the market out of several weeks in the doldrums.
On other markets, soybean futures surged while grains were mixed, livestock and meat futures were mixed, precious metals advanced slightly, energy futures were mostly lower and stock index futures retreated.
Cotton prices for delivery in March, May and July all advanced the 2 cents a pound daily limit on the New York Cotton Exchange in buying that accelerated sharply when the May contract reached 63.20 cents a pound, said Ernest Simon, cotton specialist for the investment firm Prudential-Bache Securities.
The rally marked the largest daily movement for those contracts--all of which are based on the 1987 crop--since Jan. 26, when the price on all three contracts fell nearly 2 cents a pound.
Simon attributed most of the buying to technical, rather than fundamental factors.
Judy Ganes, an analyst in New York with Shearson Lehman Hutton, said rumors of Soviet purchases of U.S. cotton may also have contributed to the rally.
“That’s it as far as fundamentals,” she said. “The market’s just been quiet for awhile and today it began to pick up.”
The contract for March delivery settled at 63.70 cents a pound.
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