* Market supported by prospects of Federal Reserve stimulus
* U.S. employers add 96,000 jobs to payrolls in Aug.
NEW YORK, Sept 7 (Reuters) - Cotton futures rose for a
second-straight day on Friday, as fund interest remained strong
on the back of a weaker dollar and prospects of further stimulus
in the world's largest economy.
Cotton benefited from a drop in the U.S. dollar and rallies
in commodities like crude oil and gold after anemic monthly U.S.
jobs data spurred investor bets that the Federal Reserve will
unveil a new round bond buybacks, know as quantitative easing,
perhaps as early as next week.
Employers added 96,000 jobs to payrolls in August, below
economists' expectations of 125,000. The unemployment rate fell
to 8.1 percent in August from 8.3 percent in July, though
economists cautioned that the fall largely reflected a drop in
participation in the labor force.
The Fed optimism comes on the heels of Thursday's move
higher across the broader financial market on the back of a new
bond-buying program in Europe aimed at containing the region's
debt crisis.
"It's all on the outside markets ... gold's up $35, the
dollar's down sharply," said Jobe Moss, of MCM Inc in Lubbock,
Texas.
"The funds just keep buying it. They're getting long, and
that's what is pulling it up."
The benchmark December cotton contract rose 0.31 cent
to end at 76.30 cents per lb, after moving between 75.55 and 77
cents.
John Flanagan, an analyst at Flanagan Trading Corp in North
Carolina, said the market also received a boost from a good
weekly export sales report, out earlier in the day Friday.
"It's a pretty good pace for this time of year for selling
cotton. I'm surprised it was as much as it was," he said.
Looking ahead, the market will turn its attention to next
week's release of the U.S. Department of Agriculture's September
crop production report on Wednesday, Sept. 12.
ICE cotton futures volumes hit 14,300 lots in late New York
business, more than 20 percent below the 30-day norm, according
to preliminary Thomson Reuters data.