* Thomson Reuters-Jefferies CRB down on U.S. jobs data
* Cotton buyers expect strong U.S. weekly export data
(Reuters) – Cotton prices rose for a second day on Wednesday, defying a commodity sell-off, on expectations of strong weekly U.S. government export data due Thursday and follow-through buying from the previous session’s gains.
The most-active May cotton contract on ICE Futures U.S. rose 0.35 cent, or 0.4 percent, to settle at 89.22 cents per pound.
The entire Thomson Reuters-Jefferies CRB index fell on concern that weak U.S. jobs and services data indicated a slowdown in the U.S. economic recovery.
Fiber bucked the trend on demand expectations, edging up to a second day of gains. Recent U.S. sale and shipment levels have been seen as strong, particularly in the face of surging prices.
Export data expected Thursday will include sales booked at prices nearly as low as 86 cents a lb, brokers said.
Those recent lows are down about 8 percent from a 1-year high of 93.93 cents touched last month, and mills have been buying on price dips, they said.
Investors were seen returning to the cotton market after taking profits following cotton’s 18-percent gain during the first quarter.
“With prices up and open interest up, it means the market is adding longs,” said John Flanagan, an analyst with Flanagan Trading Corp. in North Carolina.
Prices rose 1.7 percent during the previous session, as open interest increased by more than 2,000 contracts to 210,835 contracts, ICE data showed.
Their return further buoyed prices on Wednesday. Speculators have driven fiber’s recent rally. Last month, noncommercial dealers increased their bullish stance to the highest level in five years.
Physical buying has been underpinning the futures market, with supplies of fiber outside of China seen tightening, merchants said.
While the world is forecast to see a record global surplus by the end of the crop year through July, more than half of that are expected to become part of China’s stocks and are considered unavailable to the global market.
Beijing began building its reserves in 2011, paying above global prices to support farmers.
The world’s largest consumer is projected to hold enough in its stocks by the end of the crop year to feed fiber demand for more than a year. (Reporting by Chris Prentice; Editing by David Gregorio)