NEW YORK: US cotton futures rose more than 2 percent on Monday, as investors continued to price in tighter supply even as a US cotton plantings survey due this week is expected to show farmers intend to raise production.
The rally put cotton back within easy reach of the historic, post-US Civil War high hit on Thursday at $1.7283 a lb before, a 2.7 percent pullback on Friday.
Farmers around the world are expected to to plant more cotton this year, motivated by the market's more than 22-percent rally since the middle of January.
That did not stop the key March cotton contract on ICE Futures US from rising 3.69 cents to settle at $1.6844 per lb, near the upper end of its $1.6546 to $1.6875 session range.
Estimated total volume stood was about 21,800 lots, roughly 15 percent above the 30-day average, Thomson Reuters preliminary data showed.
Strong cotton prices in top consumer China and tight deliverable stocks of cotton on the ICE Futures US exchange reinforced the market's strong tone to start the year.
That has the market hanging on the 2011 plantings forecast to be released by industry group the National Cotton Council of America at its annual meeting in San Antonio, Texas this week.
"It appears there is going to be a pretty big struggle to secure acreage, "said Bill Raffety, senior analyst for futures brokerage Penson.
"We'll probably continue to move up until we find out what the acreage is going to be," Raffety said.
"If the acreage satisfies the needs of the end-users, then we might see this thing come off."
According to a Reuters survey conducted at the Beltwide Cotton conference early this month, the industry expects US 2011 cotton plantings to come in between 12.48 million to 12.53 million acres, a 5-year high and an increase of around 15 percent from last year's cotton sowings of 11.04 million acres.
China will likely plant 9.8 percent more acres in 2011 than the same period last year, the China Cotton Association forecast.
Cotton is the early leader of commodities in the Reuter-Jefferies commodity index so far in 2011. Last year, cotton was the best performing commodity, rising over 90 percent.
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