Cotton futures at the New York Board of Trade jumped, boosted by a soft U.S. dollar amid aggressive buying from cotton merchants.
The front-month May contract settled .72 cent higher at 52.78 cents a pound, while the most active July contract settled up 0.70 cent at 53.84 cents a pound.
Speculation on the trading floor was that one major Memphis merchant was buying aggressively, traders said.
Keith Brown, principal at Keith Brown & Co., in Moultrie, Ga., said one merchant was the dominant buyer of May, which boosted the rest of the cotton and kept it less susceptible to pressure from a falling Commodity Research Bureau Futures Index.
Mr. Brown added that the market remains bullish based on a softer dollar and the potential for strong cotton demand from China.
China is the largest consumer of U.S. cotton and is poised to import eight million bales in the current 2004-05 marketing year, according to the most recent projections from the U.S. Department of Agriculture.
Even with support from a weak dollar and potential for strong world demand, Mr. Brown said cotton futures will remain choppy while the market seeks fresh fundamental news.
The cotton market is facing a large crop for the 2004-05 season. Despite
abundant supplies, Mr. Brown said the longer-term potential is there for cotton futures to move higher.
Meanwhile, the U.S. and India are expected to produce record cotton crops in the 2004-05 season, with 23.1 million and 18 million bales, respectively, according to a report from the Agriculture Department's Foreign Agricultural Services.
India is one of the top three cotton-producing nations in the world and is a competitor for U.S. market share in cotton-importing countries.
In other commodity markets:
ORANGE JUICE: Futures on the New York Board of trade fell on technical selling from large traders, without any fresh major fundamental news to drive the market. Frozen concentrated orange juice for May delivery fell 3.40 cents a pound to 91.50 cents.
GOLD: Futures on the Comex division of the New York Mercantile Exchange rose amid the dollar's general weakness versus other major currencies. Gold for June delivery rose $2.50 an ounce to $429.