Direct line: 1300 987 995
NEW YORK, Feb 18 (Reuters) - U.S. cotton futures rose on Tuesday for the second straight session, after recent export data indicated strong demand for the fiber at a time of tight supply.
The most-active May cotton contract on ICE Futures U.S.
Traders said activity was light but prices were supported by encouraging exports data of U.S. cotton seen lately, against expectations of falling production.
"We continue to see very good demand and that is holding the market up very well," said Sharon Johnson, senior cotton analyst at KCG Futures, a division of commodities broker Knight Capital, in Roswell, Georgia.
"That aside, people are liquidating their positions in the March contract ahead of Monday's notice day, to avoid having to take physical delivery of any cotton," she said.
The March contract, the previous benchmark for U.S. cotton futures, settled down 0.7 cent, or 0.5 percent, on Tuesday. It will expire from the ICE Futures board on March 7.
Cotton prices have been on an uptrend, with the May contract rallying to a six-month high of 89.67 cents last Wednesday, just before the release of bullish exports data.
Weekly shipment data issued last Thursday showed sales of previously booked U.S. cotton were above the prior four-week average, reinforcing worries about tight supplies in the world's top exporter.
Expectations have also risen that the USDA will cut its forecast for ending inventories in the United States due to the recent pace of export sales. The government left them unchanged in the monthly supply and demand report issued on Feb 10.
(Reporting by Barani Krishnan)
((barani.krishnan@thomsonreuters.com)(+1 646 223 6192)(Reuters Messaging: barani.krishnan.thomsonreuters@reuters.net))
Keywords: MARKETS COTTON/