NEW YORK (Dow Jones)--ICE Futures U.S. cotton carved out a fresh two-month
low Wednesday as grains and other commodities prices dropped under pressure
from the rallying U.S. dollar.

March cotton settled down 84 points, or 1.18%, at 70.80 cents a pound, off
the day's 70.52 low, and the May contract settled 74 lower at 72.01.

The greenback soared as traders sought the safe-haven currency amid more
signals that China would move to curb economic growth. Traders sold most
commodities, including Chicago Board of Trade grains, metals and energies, as
the strong dollar made them more expensive in other currencies.

Analysts also fear tighter monetary policy in China could stifle an economic
recovery and demand for commodities like cotton. China is the leading producer
and importer of cotton and the top textiles producer. Much of the 2009 rally in
cotton prices was built on growing demand and tighter supplies.

Cotton is also fighting for acres, with CBOT soy, corn and wheat via futures
prices as farmers look at futures to predict returns on the crops they will sow
this spring, said Sterling Smith, market analyst at Country Hedging in St.
Paul, Minn.

"Without immediate, significant help from other markets or a sizeable
improvement in fundamentals, cotton is likely to continue working toward its
next major support level of 70 cents," said Sharon Johnson, senior cotton
analyst at First Capitol Group in Atlanta.

Analysts expect cotton prices to firm at or near that level, with underlying
support at 68 cents a pound basis March. Growing world consumption amid lower
supplies will keep cotton prices at relatively higher prices capped at 77 cents
basis March for the next two months, they said.

ICE daily cotton stocks increased by 5,378 500-pound bales Tuesday to total
427,925 bales with 36,060 awaiting review, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 1,131 positions Tuesday to total 177,032, according
to the exchange.

Volume was estimated 18,913 lots. In options, approximately 7,859 calls and
3,202 puts traded, according to exchange data.

Close Change Range
Mar 70.80 -84 pts 70.52-71.73
May 72.01 -74 pts 71.70-72.82
Dec 72.76 -56 pts 72.45-73.29