Cotton futures jumped from depressed levels on Friday as short-covering and bargain-hunting inspired buying, though prices still finished with a 5 percent weekly decline. The most-active March cotton contract on ICE Futures US rose 0.66 cent, or 1.1 percent, at 59.52 cents a lb. December futures rallied 1.22 cent, or 2.1 percent, to settle at 59.76 cents a lb on short-covering as the contract entered notice period.
No notices for delivery had so far been posted, according to ICE data on Friday. Traders were expecting a small delivery, if any, against the contract. Even with the day's gain, the second-month finished the week down nearly 5 percent as prices hovered just above last week's five-year low of 58.57 cents a lb.
"As we move down, we're uncovering more demand," said Michael Quinn, President and Chief Executive Officer of Carolinas Cotton Growers Co-operative. A US Department of Agriculture (USDA) report this week showed a sharp increase in export sales, easing worries over lacklustre mill buying. Prices have sunk 30-percent year-to-date as farmers in key producers upped acres and have begun harvesting big crops. Worries have mounted over demand from top consumer China, as Beijing overhauls its agricultural support policy.
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