NEW YORK: ICE cotton futures rose on Thursday and were on track for a third straight weekly gain on strong demand outlook for the natural fiber as worries over the Omicron coronavirus variant eased.

The cotton contract for March was up 0.57 cents, or 0.5%, at 109.40 cents per lb by 12:39 p.m. ET (1739 GMT). It traded within a range of 108.21 and 109.45 cents per lb.

The contract was on course for a weekly gain of 2%.

“Investors seem to have a general underlying feeling that Omicron may not be very severe and commodity prices will rise, moving into the new year,” said Keith Brown, principal at Keith Brown and Co in Georgia.

Wall Street’s main indexes rose after early data suggested the Omicron variant of the coronavirus was less severe than feared.

Oil prices also extended gains. Higher oil prices make polyester, a substitute for cotton, more expensive.

Meanwhile, the US Department of Agriculture’s weekly export sales report showed net sales of 243,900 running bales for 2021/2022, down 15% from the previous week and 21% from the prior 4-week average.

“Since it was the week before Christmas, the sales were pretty decent. Shipments have improved and as supply chain crisis is resolved, the US will ship more cotton,” Brown said.

Total futures market volume fell by 7,695 to 6,499 lots. Data showed total open interest gained 2,344 to 232,268 contracts in the previous session.