By Carolyn Cui

Cotton prices rose Tuesday, confounding traders who recently dumped their holdings amid economic worries and bearish fundamentals.

Cotton futures for March delivery rose 1.6% to settle at 59.85 cents, bouncing off the one-year lows hit last week at the ICE Futures U.S. exchange.

In the week ending Feb. 9, non-commercial traders dumped 27,823 lots from a week earlier to a negative 528 lots. In the latest report on World Agricultural Supply and Demand Estimates, the agricultural department revised down the U.S.'s cotton exports by 5% for the current marketing year, leading to a higher ending stock for cotton. The revision was due to "continued sluggish export sales, attributable mainly to sharply lower imports by China," the department said.

Worldwide, cotton consumption was also revised lower due to sluggish demand in China, India and Brazil. Global stocks are now forecast at just over 104 million bales.

Some analysts said the recent selloff in cotton prices was overdone. "Macroeconomic and financial concerns have trumped cotton fundamentals," wrote Louis Rose, the author of the Rose Report. "Some international merchants and analysts continue to expect ICE cotton futures to move higher to around the 65.00 level, once clarity is provided on terms of China's impending release of reserve cotton."

In other soft commodity markets, cocoa fell 1.4% to $2,834 a ton and frozen concentrated orange juice gained 4.9% to $ 1.3610 a pound. Sugar rose 0.5% to 13.22 cents a pound, while coffee edged down 0.4% to close at $1.17 per pound.