US cotton hit two-week highs on Monday, extending a rally from last week, as investors stayed bullish on the fiber amid continuous weakness in the dollar and strength in other commodities. The key July cotton contract on ICE Futures US settled up 82 cents, or 1.4 percent, at 57.79 cents per lb, after scaling a session high of 58.05 cents - a high dating back to May 15.
The market has gained 3.56 cents, or more than 6 percent, in the last two sessions. "There is tremendous influence coming into cotton from what's happening in the outside markets, the dollar included," said Keith Brown, analyst at Keith Brown and Co in Moultrie, Georgia. Industrial commodities such as crude oil and copper rallied sharply on Monday as reassuring economic data pointed to a positive turn in the US economic cycle.
Grains and softs prices rallied too. The dollar slid to its lowest level so far this year against both a basket of currencies and the euro as better-than-expected US data and sharp gains in equities reduced safe-demand for the greenback. Volume traded in July cotton was 11,215 lots. Futures for new-crop December rose 0.87 cent, or 1.4 percent, to finish at 61.72 cents.
Total volume in ICE cotton at Friday's settlement stood at 20,600 contracts, from the previous tally of 14,069 lots, exchange data showed. Open interest fell by 1,164 lots to 133,749.
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