Cotton hits 2-yr peak on bets for bullish supply-demand report, stimulus
Feb 4 (Reuters) - ICE cotton futures jumped to a more than two-year high on Thursday as investors banked on a bullish federal supply-demand report next week and a fillip to demand from additional U.S. stimulus measures.
* The cotton contract for March CTH1, CTc1 rose 2.53 cents, or 3.1%, to 83.52 cents per lb by 1:21 p.m. EST (1821 GMT), having earlier jumped to its highest since September 2018 at 83.87 cents.
* "The market is getting the idea that in Tuesday's WASDE report, we'll see an increase in exports and a reduction in carry out," said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
* In its weekly export sales report, the U.S. Department of Agriculture (USDA) showed that net sales of 286,700 running bales (RB) for 2020/2021 were down 11% from the previous week, with increases for China at 85,400 RB. nIGB560443
* The report also showed that exports of 319,000 RB were up 16% from the previous week, of which 106,500 RB were shipped to China.
* Although the weekly sales were not that strong, China emerged a top buyer, which is a positive sign, Brown said.
* The USDA's highly anticipated monthly World Agricultural Supply and Demand Estimates (WASDE) report is due next Tuesday.
* Market participants were also focused on a $1.9 trillion coronavirus relief proposal from the Biden administration in Washington.
* Ultimately, fresh stimulus could weigh on the dollar, potentially spurring demand by making cotton cheaper, Brown added.
* Democrats in the U.S. Senate were poised on Thursday to take a first step toward the ultimate passage of the relief proposal, in a marathon "vote-a-rama" session aimed at overriding Republican opposition. nL1N2KA1PF
* Total futures market volume rose by 17,317 to 62,288 lots.
* Certificated cotton stocks CERT-COT-STX deliverable as of Feb. 3 totaled 87,839 480-lb bales, up from 81,879 in the previous session.
(Reporting by K. Sathya Narayanan in Bengaluru; editing by Jonathan Oatis)