Cotton futures rose on Thursday for the third consecutive session, hitting a one-month high on a day when most other commodities fell, with buyers expecting the fibre to benefit from a rebounding economy. The December cotton contract in New York gained 0.66 cent, or about 1 percent, to finish at 64.18 cents per lb.
It hit a session peak of 63.96 - its highest since August 14. March cotton closed up 0.7 cent at 66.19 cents a lb. Oil, metals, and crops such as soybeans, corn and wheat, settled lower, taking their cue from a slide on Wall Street after three straight days of gains. "I think cotton is clearly stepping away from the rest of the agricultural crowd and distinguishing itself as an industrial commodity that would benefit well from the rebound in the economy," said John Flanagan, trader at Flanagan Trading Corp in North Carolina.
The cotton market has gained more than 4.5 cents, or nearly 8 percent, over the last two weeks. The run-up can be traced back to September 1 when speculators re-entered the market after prices had retreated in a sharp correction from the 10-month highs struck on August 13.
Analysts cited this week's US industrial output data for August, which came in positively for a second straight month. Remarks by US Federal Reserve Ben Bernanke that the recession in the United States was likely over also aided sentiment. But analysts cautioned that supply-demand fundamentals are weak for cotton.
Net upland sales of US cotton fell 49 percent from a week ago to 71,400 bales, data released by the US Department of Agriculture showed. The total volume of cotton traded on Tuesday, or September 16, was 12,598 lots versus the September 15 tally of 14,326, ICE Futures US said. Open interest was at 138,380 lots as of September 16, from the previous count of 134,494 contracts.