NEW YORK (Dow Jones)--Cotton prices settled mixed Tuesday as traders bought
contracts for the current crop year and sold those for the next season on their
differing fundamental outlooks.

Nearby May cotton, the most active contract, settled up 108 points, or 3%, at
81.84 cents a pound. December futures settled 56 points lower at 75.05.

Cotton futures have risen nearly 20% since Feb. 5 as futures rallied on
outlooks that demand from textile mills would outpace available supplies in the
current 2009-10 marketing year. Cotton consolidated since hitting two-year
highs March 1, but has climbed from last week's lows.

"Cotton is a bull market and we've had a correction off the highs. We're
getting a little recovery," said Keith Brown, principal of Keith Brown & Co. in
Moultrie, Ga.

As the old crop season winds down, traders are looking ahead to the 2010-11
crop, and the December contract that represents the first delivery period of
the U.S. fall harvest.

Stronger cotton prices this season are expected to result in a higher amount
of acres planted to cotton in spring compared to corn, soy and other
competitors. Traders use the harvest contract to gauge their possible earnings
from planting each crop.

Since outlooks for current crop fundamentals are stronger than the next crop,
speculative traders are selling December and October contracts and buying May
and July, said Mike Stevens, an independent cotton analyst and broker in
Mandeville, La.

Speculators have no use for the underlying commodity, as opposed to the
commercial traders that hedge physical supplies in the futures market.

Brown said May futures are not likely to push past recent highs at 84.60
cents.

Traders are looking ahead to the U.S. Department of Agriculture's March 31
planted acres estimate. In a preliminary estimate, the USDA pegged U.S. 2010-11
planted cotton acres at 10.5 million mid-February, up 14.75% from the year
before.

May and July futures also had support from stronger commodities and the
weaker dollar. The greenback rose against the euro as economic data suggested
growth in Germany would continue. Traders also sold the dollar ahead of a Fed
statement issued just ahead of the cotton settlement as rates were expected to
remain low. Cotton rose alongside Chicago Board of Trade grains, crude oil and
metals prices.

ICE daily cotton stocks increased by 1,963 500-pound bales Monday to total
701,288 bales with 82,524 bales awaiting review and 2,816 decertification
orders, according to exchange data.

ICE cotton open interest-–the number of active positions left at the
end of the session--decreased by 1,160 positions Monday to total 184,861,
according to the exchange.

Volume was estimated 13,896 lots. In floor options, approximately 4,255 calls
and 1,713 puts traded, according to exchange data.

Close Change Range
May 81.84 +108 pts 80.11-81.95
Jly 82.39 +107 pts 80.75-82.42
Dec 75.07 - 56 pts 74.90-75.74