NEW YORK (Dow Jones)--Trade buying amid physical demand boosted ICE Futures
U.S. cotton Thursday as a turnaround in the U.S. dollar took the lid off of
prices.

March cotton settled up 105 points, or 1.46%, at 71.85 cents a pound. The May
contract also settled 105 points higher, at 73.06.

After an extended rally that peaked at the turn of the year, cotton prices
have fallen enough to bring buyers back into the market, said Andy Ryan, risk
management consultant at FCStone in Memphis.

"There's been an incredible amount of business being done," Ryan said.

On Wednesday, March cotton futures reached a two-month low and posted 7%
losses relative to the first session of 2010. Prices slid as speculative
interest waned after a strong rally in late 2010 and prices were too high for
textile mills to pay. World cotton production proved weaker than expected and
demand climbed.

Cotton got an additional boost Thursday from abrupt dollar weakness amid a
proposal for new bank restrictions from President Barack Obama. The greenback
was strong in early trading as jitters lingered that China's moves to rein in
its economic growth would affect a global recovery. Traders tend to sell
commodities when the strong greenback makes them more expensive in other
currencies.

"The direction of [the cotton market] is dollar-related," said Boyd Cruel,
senior softs analyst at Vision Financial Group in Chicago.

Analysts said March cotton may bounce toward resistance at 73 cents a pound,
but is likely to retest the range near 70 cents-71 cents.

"I don't think the market's entirely done with the downward correction," Ryan
said.

Weekly U.S. cotton export sales data were delayed due to Monday's Martin
Luther King Jr. Day holiday but are scheduled to be released Friday at 8:30
a.m. EST (1330 GMT). Analysts expect net weekly cotton sales to come in strong
near 300,000 bales.

ICE daily cotton stocks increased by 4,478 500-pound bales Wednesday to total
437,781 bales with 32,718 bales awaiting review, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 3,074 positions Wednesday to total 173,958, according
to the exchange.

Volume was estimated 12,634 lots. In options, approximately 4,620 calls and
1,648 puts traded, according to exchange data.

Close Change Range
Mar 71.85 +105 pts 70.82-72.08
May 73.06 +105 pts 72.02-73.29
Dec 73.55 + 79 pts 72.56-73.55