NEW YORK: ICE cotton futures rose more than 1% on Monday on prospects of a market-friendly federal supply-demand report, while increased likelihood of a large stimulus package in the United States further supported the natural fibre.

The cotton contract for March rose 1.47 cents, or 1.8%, to 84.21 cents per lb by 1:17 p.m. EST (1817 GMT), having jumped to its highest level since August 2018 at 84.89 cents in the previous session. “We’re waiting for WASDE tomorrow. Average trade guess is that we will have a little bit smaller crop,” said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.

“(Also) with the price of corn, sorghum and soybeans going up like a rocket it is kind of hard to see a lot of shifting of acres back to cotton,” he said, adding that gains in the grains and equities market were also supporting cotton.

The US Department of Agriculture’s highly anticipated monthly World Agricultural Supply and Demand Estimates (WASDE) report is due on Tuesday.

“We need more cotton than we can plant this season coming up, and the demand for it will be there whether we have ample supply or not,” Louis Barbera, partner and analyst at VLM Commodities Ltd, said in a note on Sunday.

A gauge of global stock markets set another record high on hopes that US lawmakers will soon pass a $1.9 trillion COVID-19 aid package, while wheat and corn prices rose. Congress on Friday approved a budget plan that would allow the $1.9 trillion relief bill to muscle through in the coming weeks without Republican support.

Total futures market volume fell by 37,649 to 44,239 lots. Certificated cotton stocks deliverable as of Feb. 5 totaled 92,617 480-lb bales, up from 89,849 in the previous session.—Reuters