NEW YORK (Dow Jones)--Cotton prices jumped Tuesday in a broad-based rally
sparked by fund risk appetite with extra support from textile mill demand.

Nearby cotton for October delivery settled up 0.98 cent, or 1%, higher at
78.14 cents a pound on ICE Futures U.S. The most actively traded December
contract ended 0.86 cent, or 1%, higher at 74.65 a pound.

Cotton prices have declined 6% since mid June as traders expect a bumper U.S.
harvest this fall. The U.S. Department of Agriculture projected output at 18.3
million 480-pound bales last week. Relatively high cotton prices caused more of
the crop to be planted as world textile demand rebounded with the economy.
Favorable planting and development weather is also adding to potential output.
In the week ended July 11, 67% of the U.S. cotton crop was rated in
good-to-excellent condition, up from 65% the previous week, USDA data show.

Most commodities, including metals and crude, got a boost Tuesday as the
weaker dollar made contracts less expensive in other currencies. Investors fled
the greenback for riskier bets in light of bullish corporate earnings. Cotton
is particularly sensitive to economic outlooks as consumers' textile purchases
rely on their available income.

"The broad-based commodity rally has shut off some of the selling in cotton,
and then physical demand [appeared] after yesterday's decline," said Andy Ryan,
a risk management specialist at FCStone in Nashville.

Nonetheless, Ryan said he expected the December contract to trade in a tight
range of 74 cents to 75.50 cents in the very near term.

"Prices appear to be heavy. I would suspect that we may be at the beginning
of a downtrend for cotton," said Spencer Patton, chief executive officer at
Steel Vine Investments in Chicago.

ICE daily cotton stocks decreased by 3,153 500-pound bales Monday to total
214,205 with 1,846 decertification orders, according to exchange data.

ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 177 positions Monday to total 155,726, according to
the exchange.

Volume was estimated 13,156 lots. In options, approximately 1,616 calls and
2,734 puts traded, according to exchange data.

Close Change Range
Oct 78.14 +0.98 76.83-78.54
Dec 74.65 +0.86 73.30-74.80
Mar 75.65 +0.71 74.51-75.79