Cotton futures rose the most in a week on Monday after a US government report showed that export sales hit a marketing-year high in the latest week, with buyers in top consumer China leading the buying spree. The most-active March cotton contract on ICE Futures US extended gains after the US Department of Agriculture (USDA) report and closed up 0.38 cent, or 0.6 percent, at 62.01 cents a lb.
The strong USDA data helped fibre buck pressure from a weakness throughout commodities markets and a stronger US dollar. The Thomson Reuters Core/Commodity CRB index, a benchmark for global commodities markets, was lower. The dollar index advanced to fresh highs against a basket, weighing on greenback-traded commodities as it makes them more expensive to holders of other currencies.
Weekly USDA data showed foreign buyers booked 314,300 running bales of upland cotton in the week ended December 18, the most for a single week since the 2014/15 marketing year began on August 1. Buyers in China accounted for nearly half of that total, easing traders' worries about a sharp tail-off in demand in the world's largest textile market as Beijing overhauls its crop support program.
China's heavy purchasing offset worries over cancelled orders for 3,300 bales of cotton by Turkish buyers. Worries have mounted over reduced demand from the country after Turkey launched an anti-dumping probe on US cotton. The data was delayed due to the Christmas holiday last week. "We saw great export numbers today. We are trying to cast off the harvest weight. Farmers are selling into this rally," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. The front-month has recovered about 7 percent from five-year lows set in late November. Prices are poised to finish the month slightly higher, but still see a 27-percent loss in 2014.