NEW YORK, Feb 3 (Reuters) - Cotton futures surged on
Friday on investor buying fueled in part by a strong U.S. jobs
report and worries over floods in Australia which may damage the
cotton crop there, analysts said.
Financial and commodity markets were given a boost by Labor
Department data showing that the U.S. economy created jobs at
the fastest pace in nine months in January, far outpacing
analyst expectations, while the unemployment rate dropped to a
near three-year low of 8.3 percent.
Benchmark March cotton on ICE Futures U.S. rose 2.13
cents, or 2.2 percent, to close at 96.34 cents per lb, dealing
from 94.12 to 97.86 cents.
For the week the market was up 0.7 percent.
'We're probably going to try to hold the 96 and 98 cents
area,' Mike Stevens, an independent cotton analyst in Louisiana,
said when asked if cotton can sustain its advance into next
week.
The jobs data was seen by most analysts as possibly
heralding a recovery in the struggling U.S. economy, which could
translate into increased demand for cotton as people find jobs
and spend more. A surge in the U.S. stock market also helped
sentiment toward the commodity.
Open interest in cotton , an indicator of investor exposure
in the market, has risen over 11,500 lots this week alone,
hitting 179,057 lots as of Feb. 2, ICE Futures U.S. data showed.
Cotton ended up nearly 2 percent January for its second
consecutive monthly gain as better sentiment in the commodity
complex lifted cotton after a 10 percent drop in November.
Another bullish factor was news that heavy summer rains in
eastern Australia prompted evacuation warnings. Stevens said
this has made some in the cotton trade nervous about crop
prospects in that country, a major cotton exporter.
Volume traded on Friday stood at over 23,800 lots, around
two-thirds above the 30-day average, according to preliminary
Thomson Reuters data.
Market players are now looking forward to next Thursday's
U.S. Department of Agriculture monthly supply and demand report.
U.S. industry group National Cotton Council will issue its
annual survey of potential U.S. cotton plantings in 2012.