NEW YORK (Dow Jones)--Cotton prices touched their highest levels in nearly
two years Monday as bullish fundamental and technical sentiment continued to
boost prices.

Most-active May cotton settled up 83 points, or nearly 1%, at 83.29 cents a
pound on ICE Futures U.S. The contract touched 84.60 cents, in synch with the
March contract's rise to 84.32 cents, the highest price for futures on a weekly
chart since the week of March 3, 2008.

The contract has risen 22% since Feb. 5 as bullish supply and demand triggers
buying that makes for attractive technical charts.

The rally took cues from bullish U.S. Department of Agriculture data
anticipating that world cotton production will fall 12.4% short of demand in
the August-July crop year. The same data added another 9% to outlooks for U.S.
cotton exports and cut estimates for available cotton stocks by 23.25% in the
U.S.

More fuel was added to the fire last week as China's National Bureau of
Statistics said the 2009 cotton crop dropped 15% from the year. China is the
world's top cotton producer and importer. The country is also the top
destination for cotton from the U.S., the leading exporter. Some analysts,
however, question the accuracy of information from this source.

Analysts said cotton may be showing the first signs of a corrective move
lower following the significant rally.

"It's more technical buying here. The market's definitely overbought and I
think at some point we can start to see a little retracement," said Boyd Cruel,
senior softs analyst at Vision Financial Markets in Chicago.

May futures could ease back toward 80 cents a pound after pushing through 84
cents, said Sterling Smith, market analyst at Country Hedging in St. Paul,
Minn.

ICE daily cotton stocks increased by 4,029 500-pound bales Friday to total
556,846 bales with 56,102 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 266 positions Friday to total 173,772,
according to the exchange.

Volume was estimated 19,806 lots. In options, approximately 9,756 calls and
8,669 puts traded, according to exchange data.

Close Change Range
Mar 83.44 +83 pts 83.44-84.32
May 83.29 +83 pts 82.46-84.60
Dec 74.66 +24 pts 74.00-74.70