India worries

Among soft commodities, cotton fared particularly well, adding 1.3% to 72.04 cents a pound for March in late deals in New York, and set for a two-month closing high.

The gain was helped by strong US export sales (although not export) data, and strong Chinese imports last month too.

Furthermore, there are growing worries over output prospects in India, where Commerzbank reported that “pest infestation has caused significant crop losses and is reducing the supply available for export.

“Current crop estimates are for 37.5m bales,” below figures of a record 40m bales which had been pencilled in, and prompting downgrades to export hopes.

“One of India’s leading cotton exporters therefore expects a reduced export supply of about 6m bales, while previous estimates came to 7.5m bales,” Commerzbank said.

“Consequently, the demand for US cotton from major importing countries Bangladesh, Vietnam and China should rise, and the stock build-up outside China should be somewhat smaller,” a dynamic which “suggests higher prices overall”.