By Carolyn Cui 
 

Cotton rose Thursday after a U.S. government report showed overseas demand for U.S. fiber remained robust.

Cotton futures for May delivery added 0.2% to 77.50 cents a pound on the ICE Futures U.S. exchange.

Net export sales of upland cotton, the most commonly grown variety in the U.S., totaled 328,200 bales in the week ended March 16, up 4% from the prior week, the U.S. Department of Agriculture said in its weekly export sales report. U.S. exports increased to Vietnam, Turkey and China.

"The report was tremendous, both in shipments and sales," said Louis Rose, founder of Rose Commodity Group.

Some market participants were expecting exports to slow down after weeks of strong sales. As of March 16, total export sales reached 7.5 million running bales, or 76% higher from the same time a year earlier.

Cotton futures have been rising on robust demand for U.S. fiber overseas, fueled by a 45% decline in Brazilian exports this year after strong sales a year earlier, as well as fears of a trade war that have resulted in aggressive buying from major cotton importers in Asia.

For instance, China's cotton imports in February soared 146% year-on-year to 138,100 tons, according to the China Cotton Association.

However, some analysts said that the cotton rally now looks fragile as speculators were exiting their bullish bets ahead of the USDA's prospective planting report, which is expected to show an increase of cotton acreage for the next crop year. The report is scheduled to be released on March 31.

"This market is not bearish by any means, but the timing and the market structure just do not seem right" to be bullish, Mr. Rose said.

On average, traders and analysts expect the government to revise up the planting projection to 11.9 million acres, from its initial projection of 11.5 million.

In other markets, raw sugar for May added 0.5% to 17.38 cents a pound, while cocoa for May was unchanged at $2,165 a ton. Arabica coffee for May delivery lost 0.3% to $1.4130 a pound, and frozen concentrated orange-juice futures for May fell 0.6% to $1.8780 a pound.

Write to Carolyn Cui at carolyn.cui@wsj.com<mailto:carolyn.cui@wsj.com>

(END) Dow Jones Newswires

March 23, 2017 11:53 ET (15:53 GMT)