By Julie Wernau

The cotton market gained a boost Wednesday from a weaker dollar ahead of a weekly update on sales of the fiber overseas.

Cotton for March delivery rose 1.1% to end at 70.13 cents a pound on the ICE Futures U.S. exchange. The Wall Street Journal dollar index, which measures the dollar against a basket of currencies, was down 0.2% recently, making dollar denominated goods relatively less expensive abroad.

"The bias is still to the upside, but it's a tread lightly trade," said Erik Tatje, market strategist at RJO Futures in Chicago. Demand for cotton has been robust in recent weeks and traders are largely anticipating strong demand again in Thursday's report. Bulls have piled into thecontract over the last month and any surprise to the downside could lead to a selloff in those bets, which were at near record highs for the year as of last Tuesday.

Mr. Tatje said a move above 72 cents would be a good opportunity to place short positions.

The USDA reported that as of the week ended Dec. 15 it had classed 967,649 bales of upland cotton, the most common variety grown in the U.S., which brings the season total to about 75% of USDA's expected production, according to The Rose Report, mostly of strong quality.

In other markets, raw sugar for March was down 0.3% to end at 18.20 cents a pound, cocoa for March rose 1% to close at $2,279 a ton, arabica coffee was up 0.5% to settle at $1.4455 a pound, frozen concentrated orange juice for January delivery lost 2% to end at $1.9785 a pound and March cotton was up 1.1% to close at 70.13 cents a pound.

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(END) Dow Jones Newswires

December 21, 2016 16:23 ET (21:23 GMT)

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