NEW YORK: Cotton futures made gains on Tuesday after six down sessions, lifted by strong US economic data and less fear about the economic health of China, the world's top textile market.
The most-active December cotton contract on ICE Futures US closed up 1.77 cents, or 2.1 percent, at 84.95 cents per lb.
Global financial markets rose amid better-than-expected US economic data and easing concern about the Chinese economy after the country's central bank soothed fears over a possible credit crunch.
The easing worries translated to gains for cotton, as the third-month contract rallied the most in almost two weeks and stemmed a six-session slide that included the fiber's worst week in a year.
The day's gains came amid renewed buying and limited short covering after the recent selloff left cotton poised for a bounce, dealers said.
"As the prices start to rise, people who are short got nervous and they started to get out," said John Flanagan, an analyst at Flanagan Trading Corp in North Carolina.
July delivery notices totaled 1,030 contracts, according to the exchange, or about 100,000 bales of cotton.
Dealers said the increase in delivery notices on the second notice day supported futures prices because it indicated demand in the physical market had led one main taker to source cotton from the exchange.
A US crop report released after Monday's close showed continued delays for the new cotton crop, adding to a sense of tightness in upcoming US supplies.
"The lateness of the crop and a low US beginning stocks figure are still sources of major concern for the international trade community," INTL FCStone analysts said in a research note.
Earlier this month, the US Department of Agriculture forecast lower-than-expected US stocks and production in the 2013/14 crop year beginning Aug.1, due to higher abandonment rates in drought-ridden Texas, the top producing state.
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