950817

- Cotton lip by 2pc limit

NEW YORK: New York cotton futures remained sharply higher at midday, locked at the 2.00-cent daily limit on fund buying, market sources said.

"It's all fund buying, with the trade as a scale up seller," said Dean Witter vice president Steve Platt. He noted that continued fund short covering had evolved into fresh fund buying.

At 1148 EDT, most-active December was locked up the 2.00-cent limit at 76.55 cents a lb. Its low was 75.10. Spot October was also up 2.00 cents at 78.75. March, May and July 1996 were up the 2.00-cent limit as well.

Traders said buy stops were hit in the most-active December contract above 76.00 cents a lb.

One trader also noted that the market broke through the closely monitored 40-day moving average.

Analysts said the bullish sentiment could be traced to possible damage by pests in the Delta and Texas, concerns that Hurricane Felix could shed too much rain on Carolina crops, and inadequate rains in India's cotton producing centers.

"There's a lot of uncertainty in regard to the supply side," Platt said. -Reuter