By Julie Wernau

Cotton futures moved sharply higher Monday as a weaker dollar and concerns about lower supply of the fiber out of India outweighed a move by China to unload its vast stockpiles.

Cotton for July delivery rose 3.1% to 61.86 cents a pound on the ICE Futures U.S. exchange, on track for its biggest percentage gain since Oct. 13, 2015.

The dollar is relatively weak coming into today, which is supportive to commodities across the board."

India is the world's largest producer of cotton.

When the dollar is weak against the currencies of commodity importing nations, it encourages buying activity because dollar-denominated goods are cheaper.

The boost for cotton prices surprised some traders who had expected lower prices Monday as a result of news out of China that it plans to offer up 9 million bales of its reserve surplus at auctions between May 3 and Aug. 31.

But the nation also said it plans to purchase additional high quality cotton going forward to boost the quality of reserves, which would potentially add demand for U.S. cotton.

China is the third largest importer of cotton.