NEW YORK (Dow Jones)--Speculative selling amid the strong dollar weighted ICE
Futures U.S. cotton Tuesday despite commercial buying that picked prices off of
12-week lows.

March cotton settled down 14 points, or 0.2%, at 69.82 cents a pound and off
the 69.38 low.

ICE cotton futures have been in correction for most of January following a
late 2009 rally. Lower-than-expected production and tight supplies amid growing
world demand boosted prices on ideas of a world economic recovery. A stronger
economy helps consumers restock the worn-out textiles they neglect to replenish
during a recessionary period.

However, renewed concerns that China's moves to rein in its strong economy
sent the safe-haven dollar higher on ideas the world economic recovery would
suffer. Traders sold commodities futures, which became more costly in other
currencies as the greenback firmed. Coffee, cocoa and sugar also settled lower.

March cotton futures fell to their lowest price point since Oct. 29, where
buying from commercial traders boosted prices back into positive territory. The
market's recent swift drop indicated it was technically oversold, a term
indicating it had fallen too far, too fast, according to technical chart
analysis measurements. Selling wore off and cotton bounced.

However, selling again kicked in ahead of the settlement and left futures
modestly weaker.

Cotton isn't expected to make much headway in the next week, with the
potential for the March contract to gain as much as 1 cent, said John Flanagan,
president of Flanagan Trading in Fuquay-Varina, N.C.

In the case of continued dollar strength, cotton could test support at 68.80
basis March, said Boyd Cruel, senior softs analyst at Vision Financial Markets
in Chicago.

ICE daily cotton stocks increased by 5,478 500-pound bales Monday to total
453,425 bales with 41,368 bales awaiting review and 2,464 decertification
orders, according to exchange data.

ICE cotton open interest – the number of active positions left at the
end of the session - decreased by 1,118 positions Monday to total 172,129,
according to the exchange.

Volume was estimated 21,005 lots. In options, approximately 16,239 calls and
3,776 puts traded, according to exchange data.

Close Change Range
Mar 69.82 -14 pts 69.38-70.44
May 71.16 - 7 pts 70.65-71.71
Dec 71.55 -46 pts 71.50-72.20