Cotton prices are jumping after a new forecast predicts the fiber will remain in short supply this year while demand stays strong.
Cotton for March delivery added 6.65 cents to settle at $1.7451 a pound Monday.
The National Cotton Council of America predicted U.S. cotton supplies will remain tight even though U.S. acreage planted this year is expected to increase about 14 percent. That's based on a survey of farmers the trade group conducted between mid-December and mid-January.
Supplies are expected to fall to 2.3 million bales by July 31, the council said in a statement issued Friday.
While the forecast mirrors predictions from other organizations, it emphasizes ongoing supply issues even as more nations, particularly China, use more cotton.
Later this week, the U.S. Agriculture Department is expected to release an updated global agriculture supply and demand forecast. In January, it predicted supplies of about 2.95 million bales as of July 31.
"We're continuing to get exceptionally strong evidence that demand is as high as it's ever been for cotton," said Spencer Patton, founder and chief investment officer for hedge fund Steel Vine Investments LLC.
Cotton prices nearly doubled last year after adverse weather in the United States, China, Pakistan, Australia and other countries cut into harvests.
Other commodities largely were mixed on the day.
Gold for April delivery lost 80 cents to settle at $1,348.20 an ounce.
In contracts for March delivery, silver added 28.4 cents to settle at $29.343 an ounce, copper slipped 0.45 cent to $4.575 a pound and palladium added $2.60 to $819.05 an ounce. April platinum fell $1.60 to settle at $1,844.20 an ounce.
Benchmark crude for March delivery fell $1.55 to settle at $87.48 per barrel on the New York Mercantile Exchange.
In other Nymex trading for March contracts, heating oil lost 1.06 cents to settle at $2.7061 per gallon, gasoline futures gained 1.52 cents to settle at $2.4505 per gallon and natural gas fell 20.6 cents to settle at $4.104 per 1,000 cubic feet.
In agricultural contracts for March, wheat added 5 cents to settle at $8.5875 a bushel, corn slipped 3.75 cents to settle at $6.7475 a bushel and soybeans fell 9 cents to settle at $14.245 a bushel.
