ICE cotton futures jumped more than 2 percent on Monday to a more than two-week high, supported by buying by mills and a weaker US dollar. The March cotton contract on ICE Futures US hit a high of 74.94 cents a lb during the session, a peak since Jan. 5. It also recorded the biggest daily percentage gain since Jan. 4.
The market was reacting to the large mill on-call sales commitments, a weaker US dollar and tightness in supply from India, said Louis Rose, an independent cotton trader and consultant with Risk Analytics in Memphis.
Cotton supplies in Indian spot markets fell 15.9 percent from a year earlier to 10.8 million bales between October and December as the government's move to scrap high-value currency notes disrupted trading, a leading trade body said on Monday.
The dollar fell to a seven-week low against a currency basket on Monday, weighed down by concerns about the early days of US President Donald Trump's administration.
The March cotton contract on ICE Futures US settled up 1.59 cents, or 2.18 percent, at 74.63 cents per lb. It traded within a range of 73.03 and 74.94 cents a lb.
Total futures market volume rose by 17,246 to 38,038 lots. Data showed total open interest gained 1,122 to 260,450 contracts in the previous session. The dollar index was down 0.59 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.22 percent.