NEW YORK: ICE cotton futures rose more than 3% on Friday en route to its best week since February 2018, helped by a positive federal jobs report that bolstered bets for an early economic recovery and in turn, demand for the natural fibre.
Cotton contracts for July rose 1.82 cent, or 3%, to 61.82 cents per lb as of 1:21 p.m. EDT (1721 GMT). It traded within a range of 59.75 and 62.32 cents a lb.
The contract rose 7.3% so far this week, largely helped by drier weather in top-producer Texas.
"The good feelings and strength in the economy is giving cotton prices a much needed boost" said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago.
The US economy unexpectedly added jobs in May after suffering record losses in April, offering the clearest signal yet that a downturn triggered by the COVID-19 pandemic was probably over.
The report had several "green shoots" for apparel demand said Ed Jernigan, chief executive of Jernigan Global, a cotton textile supply chain manager.
But retailers are going to need some time to recover from the protests that have impacted the largest US cities driving apparel demand, potentially reducing cotton uptake at retail by at least 750,000 bales this year, Jernigan added.
Prices scaled an over two-month peak earlier in the week and has held above 60 cents per lb so far.
"Monday's technical move was a very important close... our next target will be in the 64.00-66.00 cents per lb range but I don't see us moving much higher in the next couple of months," Lakefront's Marcus said.
Total futures market volume rose by 15,197 to 43,638 lots. Data showed total open interest fell 390 to 185,711 contracts in the previous session.
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