NEW YORK (Dow Jones)--Cotton prices settled at their highest levels in two
weeks Thursday as data supported the case of dwindling fiber supplies and
strong demand.

Nearby cotton for July delivery settled 1.19 cent, or 1.15%, higher at 82.51
cents a pound on ICE Futures U.S. The most-active December contract ended 1.44
cent, or 2%, higher at 79.07 cents.

Cotton prices have been lifted and held aloft in the last year as rebounding
economic growth triggers a new influx of textile consumption. Data released
Thursday by the U.S. Department of Agriculture indicated that world cotton
production would fall 13% short of demand in the year that ends July 31. The
USDA raised U.S. cotton exports outlooks in that timeframe as well, in line
with trader expectations following recent withdrawals from exchange stocks. At
the same time, U.S. cotton sales for export in the week to June 3 soared to the
highest levels this season. China, the world's leading cotton producer,
importer and textile manufacturer, was the top buyer.

"The market may have dialed all of that in," said Keith Brown, principal of
Keith Brown & Co. based in Moultrie, Ga.

On the broader economic scale, bullish global economic outlooks lifted
equities markets and commodities prices. Signals of strong economic growth came
from a 48% year-on-year increase in China's May exports, the country confirmed
Thursday. Similar data were reported by Reuters Wednesday. The European Central
Bank's outlook for strong euro zone economic growth paired with lower weekly
U.S. jobless claims added to enthusiasm.

Index fund traders took the opportunity to continue to roll from the July
contract to the December contract Wednesday as Thursday's rally interrupted
normal rolling procedure.

However, the market has had this scenario in its sights for months and it may
need a fresh boost to maintain bullish traction.

"We need a new event to come along, [for example] a weather scare in Texas
to cause the market to have further reason to go higher," Brown said.

Cotton traders are keeping a close watch on the development of the 2010 U.S.
cotton crop that is nearly 100% planted. The USDA estimates the U.S. will
produce 36% more cotton with the 2010 fall harvest than in 2009, though world
demand is expected to gobble up those supplies. Any damage to the crop could
send prices higher.

ICE daily cotton stocks decreased by 80,348 500-pound bales Wednesday to
total 795,994 with 80,523 decertification orders, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--fell by 1,223 positions Wednesday to total 174,998, according to
the exchange.

Volume was estimated 66,857 lots. In options, approximately 5,763 calls and
5,275 puts traded on the floor, according to exchange data.

Close Change Range
Jly 82.51 +1.19 81.66-83.99
Oct 78.64 +1.38 77.50-79.07
Dec 79.07 +1.44 77.14-79.18