NEW YORK, Feb 4: Cotton futures surged on Friday on investor buying fuelled in part by a strong US jobs report and worries over floods in Australia which may damage the cotton crop there, analysts said.
Financial and commodity markets were given a boost by Labor Department data showing that the US economy created jobs at the fastest pace in nine months in January, far outpacing analyst expectations, while the unemployment rate dropped to a near three-year low of 8.3 percent.
Benchmark March cotton on ICE Futures US rose 2.13 cents, or 2.2 per cent, to close at 96.34 cents per lb, dealing from 94.12 to 97.86 cents.
For the week the market was up 0.7 per cent.
“We’re probably going to try to hold the 96 and 98 cents area,” Mike Stevens, an independent cotton analyst in Louisiana, said when asked if cotton can sustain its advance into next
The jobs data was seen by most analysts as possibly heralding a recovery in the struggling US economy, which could translate into increased demand for cotton as people find jobs and spend more.
A surge in the US stock market also helped sentiment toward the commodity.
Open interest in cotton, an indicator of investor exposure in the market, has risen over 11,500 lots this week alone, hitting 179,057 lots as of February 2, ICE Futures US data showed.—Reuters