Cotton futures hit 80 cents a pound for the first time in seven months even as many other soft commodities faltered, with a wave of producer selling blamed for derailing the rally in arabica coffee prices.
New York cotton for March delivery touched 80.23 cents a pound at its intraday high on Monday, a gain of 2.1%, and the highest price for a spot contract since June.
The gain took close to 7% the fibre's price recovery so far this year, on a rebound attributed both to fundamental and technical factors.
"We seem to be getting some better ideas on demand," said Keith Brown, at US-based cotton broker Keith Brown & Co, flagging signals that Europe's economy "seems to be turning the corner", while China "is putting in stimulus measures to stimulate the textiles industry".
The textiles sector in China, the top cotton producing and consuming country, has been put under strain by government measures to support prices of the fibre - policies which, while boosting farm profitability, have squeezed margins up the processing chain and driven trade abroad.
'Sensing a move upwards'
There is also a waning sense that China could use its huge inventories to damage prices.
"When they have half the world's cotton inventories, they will not want prices to go down," Mr Brown said.
And technically, cotton futures have moved towards filling in a chart gap dating from a slide in prices in May last year, following poorly-received revisions in a US Department of Agriculture Wasde crop report.
"The most obvious move now is to paint that gap over," Mr Brown said, adding that "people are sensing a move upwards in cotton, and that they had better buy for today".
Indeed, the May contract, which closed at an eight-month high of 80.08 cents a pound, could hit 90 cents a pound, he told Agrimoney.com.
Softer softs
However, the rise in cotton prices, which for March closed up 1.8% at 79.93 cents a pound, contrasted with a poor day for other soft commodities.
New York raw sugar for March fell 1.4% to 18.12 cents a pound, the lowest finish for a spot contract since August 2010, as rains in central Brazil boosted hopes for the cane crushing season starting in April.
New York cocoa for March dropped 3.2% to $2,213 a tonne, amongst its lowest levels of the last six months.
'Down to producer selling'
Arabica coffee for March slumped 4.9% to close at 148.60 cents a pound in New York, on a decline attributed in part to the Brazilian rains boosting prospects for this year's crop, but in the man to selling of farmers' inventories.
"It is down to producer selling," Macquarie analyst Kona Haque told Agrimoney.com.
Producers have some 35-40% of last year's crop yet to sell, on Macquarie estimates.
"They are waiting for rallies to sell into," Ms Haque said, flagging that the rise in prices close to 158 cents a pound in the last session appeared a trigger for the liquidation in this one.
"Every rally is going to see producer selling," she said.
