Cotton Climbs as Commodities Advance on Crude Oil, Weak Dollar

By Yi Tian

Dec. 10 (Bloomberg) -- Cotton futures climbed in tandem with other commodities as crude oil gained and the dollar fell.

Crude oil jumped as much as 9.8 percent on speculation that Russia will coordinate a production cut with OPEC next week to end a five-month slump in prices. The U.S. currency fell to the lowest in almost two weeks against a basket of six counterparts, pushing up the Reuters/Jefferies CRB Index of 19 raw materials.

“Cotton is following the weakness of the dollar and the strength of outside markets,” said Hibbie Barrier, a director at Avondale Partners in Nashville, Tennessee. There’s “nothing specific” about cotton’s supply and demand that would cause today’s gain, he said.

Cotton futures for March delivery rose 0.72 cent, or 1.7 percent, to 43.67 cents a pound on ICE Futures U.S. in New York. Still, most-active contracts have tumbled 36 percent this year, touching a six-year low last month, on concern the slumping economy will erode demand for commodities, including the fiber used in clothing and textiles.

“Cotton is going with the flow of money one way or another,” Barrier said. “There will be more days like that when cotton is up or down a hundred points without a good reason.”

The CRB index, which gained as much as 3.2 percent today, is still down 39 percent this year.

To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net.