ICE cotton futures gained nearly 1 percent on Wednesday, boosted by demand for the natural fiber from speculators. Cotton contracts for March settled up 0.68 cent, or 0.91 percent, at 75.71 cents per lb after trading within a range of 74.95 and 75.95 cents a lb.
"I think its just a continuation of the bullish sentiment we have had for the past few weeks," said Beau Stephenson, merchant at Omnicotton Inc. "Speculators are taking a larger long position not finding the resistance on the way up that you find at this time of the year."
Demand from speculators has led a recent rally in cotton prices, which saw the March contract touch an all-time high of 76.75 cents a lb last week, analysts said. Influential Wall Street bank Goldman Sachs raised its three, six and 12-month cotton price forecasts to 75 cents per lb from 70 cents earlier, on expectations global growth will likely remain strong but not accelerate much further.
Rising crude oil prices also point to slightly less competition from man-made fibers, the bank said in a research note dated Tuesday. The dollar index, which measures the greenback against six major currencies, was down 0.14 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.58 percent.
Total futures market volume fell by 4,085 to 20,574 lots. Data showed total open interest fell 767 to 265,088 contracts in the previous session. The market is awaiting weekly export sales data from the US Department of Agriculture on Thursday.
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