Cotton futures finished at a month high Friday on technically inspired buying and the momentum from the advance may spill over into trading next week, brokers said. The December cotton contract climbed 1.85 cents, or by 2.40 percent, to close at 78.76 cents per lb, dealing from 76.68 to 78.94 cents.

It was the highest close for the second position contract since July 1, according to Thomson Reuters data. On the week, the contract was up 4.54 percent and gained 3.11 percent on the month. The spot October cotton contract added 1.68 cents or by 2.08 percent to finish at 82.36 cents. October has a 3.60 cents premium over key December, down from the previous session's premium of 3.77 cents.

Volume traded in the December contract stood at 15,402 lots at 2:51 pm EDT (1851 GMT). "You've got a strong technical picture and help from the outside markets," Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said as he referred to the broad-based advance in commodity markets like grains.

The technical inspiration for cotton was drawn from the fact that the December contract recently raced past the 200-day moving average around 76.71 and was now taking aim at the 100-day MA at 79.32 cents. Sharon Johnson, cotton expert at First Capitol Group, said the weakness of the dollar, end-of-the-month buying and short-covering boosted cotton futures as well.

The October contract continued to enjoy a premium over December because of tight deliverable stocks. US certificated cotton stocks stood at 47,571 (480-lb) bales as of July 29, from 47,793 bales on July 28. On June 3, they stood at 1.08 million bales. Cotton stocks are at their lowest level since 2004, according to exchange data.

The market will next turn its focus on the USDA's weekly crop progress report on Monday. Brokers Flanagan Trading Corp sees resistance in the December contract at 79.80 cents, with support at 78.75 and 77.90 cents. Volume traded Thursday reached 12,131 lots, from the prior tally of 11,973 lots, ICE Futures US data showed. Open interest in the No 2 cotton market was at 167,092 lots as of July 29, compared to the prior 164,826 lots, the exchange said. back