Cotton surged the daily limit to a record in New York on signs that demand is exceeding supplies before new harvests later this year. May-delivery cotton rose 7 cents, or 3.3 percent, to the all-time high of $2.1970 a pound by 11:09 a.m. London time on ICE Futures U.S. in New York. The March contract last traded at $2.27, or 3.32 cents more than the May futures, signaling limited supplies. This year’s cotton crop in the U.S., the biggest exporter, won’t be available until after August. “Recent price gains have been for the nearby contracts from March to July, so supplies of the old crop are extremely tight,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul. “The market has been driven by fundamentals, not technical factors.” U.S. sales surged 56 percent from a week earlier to 403,341 bales in the week ended Feb. 24 as shipments increased to China, Turkey and Bangladesh, the U.S. Department of Agriculture said March 3. China aims to boost output by 13.9 percent to 6.8 million metric tons this year, according to a government report issued at the meeting of the National People’s Congress in Beijing on March 5. Production fell 6.3 percent to 5.97 million tons last year, the National Bureau of Statistics said Feb. 28. Best Performer Cotton futures, which have more than doubled in the past year, are the best performer among the 19 commodities on the Thomson Reuters/Jefferies CRB Index. China’s January imports jumped 31 percent from a year ago to 390,720 tons, the customs agency said last month. China is the biggest consumer and producer of cotton. The U.S. is forecast to be the top exporter in 2010-2011, followed by India, Uzbekistan, Australia and Brazil, according to the USDA. To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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