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U.S. Commodities: Cotton Jumps as Mounting Demand Tops Supplies

Cotton jumped the most allowed by ICE Futures U.S. for the second straight day as growers struggled to meet soaring demand in China, the world’s biggest consumer.

Orders for U.S. exports in the year that ends July 31 have more than doubled from a year earlier, Department of Agriculture data show. For the week ended Nov. 25, shipments were up 21 percent from a week earlier, the USDA said. Cotton prices have surged 67 percent in 2010 as U.S. inventories tumbled and demand rose at Chinese textile mills.

“We’re exporting so much cotton we can’t get it out of the country fast enough,” said Louis Barbera, a broker at VIP Commodities in New York. “The physicals are almost all the way committed.”

In other markets, cocoa surged the most since October 2009 as a disputed presidential election in Ivory Coast, the world’s largest grower, threatened to disrupt exports. Crude oil also gained. The UBS Bloomberg Constant Maturity Commodity Index advanced 1 percent to 1,546.44.

Cotton futures for March delivery jumped by the exchange limit of 5 cents, or 4.1 percent, to settle at $1.2634 a pound on ICE in New York, the highest since Nov. 19. Yesterday, the limit was 4 cents. The fiber reached a record of $1.5195 on Nov. 10.

The commodity is heading for the biggest annual gain since 1973.


Cocoa futures for March delivery jumped $110, or 4 percent, to $2,868 a metric ton on ICE Futures U.S. in New York. The price has dropped 13 percent this year.

At least six people were killed and 17 were wounded in a shooting at the party office of candidate Alassane Ouattara last night. Ivory Coast’s electoral commission named Ouattara the winner of the Nov. 28 election, a ruling that the Constitutional Court said was invalid after a deadline was missed to announce results.

“People are concerned about supplies because of all the turmoil,” said Phil Streible, a senior strategist at Lind-Waldock, a broker in Chicago.

Crude Oil

Crude oil rose to a two-year high after European Central Bank President Jean-Claude Trichet said the bank will delay its withdrawal of stimulus measures and pending sales of existing U.S. homes jumped by a record amount.

The dollar dropped against the euro after Trichet said the ECB will keep offering banks as much cash as they want through the first quarter. The number of Americans signing contacts to buy previously owned homes increased 10 percent in October, the National Association of Realtors said.

“The dollar’s drop is giving the market support,” said Peter Beutel, the president of Cameron Hanover Inc., a trading- advisory company in New Canaan, Connecticut. “There’s an inverse correlation between the dollar and oil, and we’re seeing it at work today.”

Oil futures for January delivery rose $1.25 to $88 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 8, 2008. The price has climbed 15 percent from a year ago.

Commodities settled as follows:

Precious metals: February gold up $1 to $1,389.30 an ounce March silver up 15.9 cents to $28.572 an ounce January platinum up $29.10 to $1,713.10 an ounce March palladium up $31.40 to $763.70 an ounce

Livestock: February live cattle down 0.3 cent to $1.06475 a pound January feeder cattle up 0.275 cent to $1.18675 a pound February lean hogs up 0.75 cent to 76 cents a pound February pork bellies unchanged at $1.045 a pound

Grains: January soybeans down 3.25 cents to $12.7975 a bushel March corn down 10.75 cents to $5.555 a bushel March wheat up 8.5 cents to $7.485 a bushel March oats down 2 cents to $3.61 a bushel

Food and Fiber: March coffee up 0.15 cent to $2.037 a pound March cocoa up $110 to $2,868 a metric ton March cotton up 5 cents to $1.2634 a pound March sugar up 0.08 cent to 28.45 cents a pound January orange juice up 2.7 cents to $1.5545 a pound

Energy: January crude oil up $1.25 to $88 a barrel January natural gas up 7.4 cents to $4.343 per million British thermal units January heating oil up 4.9 cents to $2.4546 a gallon January gasoline up 5.49 cents to $2.3553 a gallon

Others: March copper up 3.15 cents to $3.979 a pound March lumber down $3.50 to $268 per 1,000 board feet

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