DJ Cotton Prices Remain Elevated; Arabica Coffee Bounces

   By Alexandra Wexler


  NEW YORK--Cotton prices rose Tuesday as demand for the U.S. fiber from abroad
continued to stoke worries about tight domestic supplies.

  "U.S. exports continue at an amazingly high level," Commerzbank said in a
note. "The supply of high-quality U.S. cotton is tight at present."

  Cotton for delivery in May on the ICE Futures U.S. exchange was recently 0.8%
higher at 92.76 cents a pound. Prices have risen steadily in 2014, after this
season's cotton harvest shaped up to be the smallest since the 2009-10 crop
year.

  While overseas demand for U.S. cotton is strong, some analysts say that won't
be the case if prices rise much further. Many traders and analysts say if the
price of cotton reaches 95 cents a pound, textile mills in Asia, the top
importers of the fiber, might buy from other countries.

  "Given the push to new seasonal highs last week, [the weekly export] sales
should be disappointing" when they are released Thursday morning, said Sharon
Johnson, an Atlanta-based cotton specialist representing KCG Futures.

  In other markets, arabica-coffee futures rebounded after investors took
profits over the last two sessions, sending the market down 7.1%, the biggest
two-day drop since October 2012.

  The worst drought in decades in top coffee grower and exporter Brazil has
spurred worries about supplies and pushed the market up 73% since the start of
2014.

  "While there is a better outlook for rain to close out the month, the amount
of help it will readily provide to the current crop is doubtful at best,
although some moisture may allow some degree of benefit to the 2015 crop," said
Sterling Smith, a futures specialist at Citigroup in Chicago. "Expect volatile
trade and higher trade Tuesday and Wednesday."

  Arabica coffee for delivery in May on ICE was recently 0.8% higher at $1.9285
a pound.

  Cocoa for delivery in May was 0.3% lower at $3,020 a ton, and orange juice
for May delivery was 0.4% lower at $1.5180 a pound. Raw sugar for May delivery
was recently down 0.4% at 16.98 cents a pound.


  Write to Alexandra Wexler at alexandra.wexler@wsj.com


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  (END) Dow Jones Newswires

  March 18, 2014 09:09 ET (13:09 GMT)

  Copyright (c) 2014 Dow Jones & Company, Inc.

031814 13:09 -- GMT