NEW YORK--Cotton futures topped 85 cents Friday, reaching a more than two-month high as strong U.S. export sales countered news that China will soon stop stockpiling the fiber.
Cotton for delivery in March on the ICE Futures U.S. exchange rose to 85.20 cents a pound. The contract was recently up 2.2% at 84.75 cents a pound.
"If there ever was a week for the market to rally you wouldn't think it would be Christmas week," said Sharon Johnson, an Atlanta-based senior cotton specialist at KCG Futures.
Prices moved higher after the U.S. Department of Agriculture reported U.S. cotton-export sales. In the week ended Dec. 19, the U.S. sold 221,600 bales of upland-variety cotton. While that was 6% lower than the previous week, the sales are strong considering how close the week was to the Christmas holidays and that prices were near a two-month high, Ms. Johnson said.
The sales figures "are stronger than expected," she said.
Futures were climbing despite a report from China's Xinhua news agency that said the government intends to end its cotton-stockpiling program, replacing it instead with direct subsidies for farmers.
Traders and analysts have widely expected that China's stockpiling program, which has helped support global cotton prices, would end in the near future.
(Chuin-Wei Yap contributed to this article.)