NEW YORK (Dow Jones)--Cotton prices edged higher Monday as buying from
textile mills lifted prices modestly after profit taking dragged them down.

Cotton for May delivery on ICE Futures U.S. settled up 29 points, or 0.35%,
at 80.76 cents a pound.

Cotton prices have traded in a roughly 78.50-84.60 range since March l, when
the market reached two-year highs. Futures eased back in recent weeks from a
22% rally that began since Feb. 5 on forecasts that demand would outpace supply
in the ongoing 2009-10 crop year.

Cotton prices rose in early dealings, but traders sold at highs to take
profits, said John Flanagan, president of Flanagan Trading Corp. in
Fuquay-Varina, N.C.

Added pressure came in midday a the stronger dollar and weaker commodities
prices spilled over into cotton, said Jack Scoville, vice president at Price
Futures Group in Chicago.

The greenback rose as risk appetite retreated amid tense interactions between
China and the U.S. regarding currency policy. The strong dollar makes futures
contracts more expensive in other currencies. Commodities including sugar,
coffee and cocoa were lower for much of cotton's trading session.

But mill buying just under 80 cents buffered losses, a trend that is likely
to continue in the near term, Flanagan said.

Analysts have said textile mills are in a hand-to-mouth buying pattern as
they attempt to wait out the lowest prices possible while striving to meet
orders from textile manufacturers. Retailers are thought to be refilling their
scaled-down textile inventories on thoughts that an economic recovery will
reignite consumer purchases.

The most recent estimates from the U.S. Department of Agriculture show the
world cotton consumption will outpace production by 13% in the August-July
marketing year.

ICE daily cotton stocks increased by 19,119 500-pound bales Friday to total
703,251 bales with 64,585 bales awaiting review, according to exchange data.

ICE cotton open interest the number of active positions left at the end of
the session, decreased by 293 positions Friday to total 186,021, according to
the exchange.

Volume was estimated 9,966 lots. In options, approximately 1,437 calls and
1,358 puts traded, according to exchange data.

Close Change Range
May 80.76 +29 pts 79.28-81.27
Jly 81.32 +30 pts 80.36-81.80
Dec 75.63 + 1 pts 75.00-75.74