ICE cotton futures jumped over 1 percent on Thursday, hitting a two-week high, supported by a weaker dollar and short-covering by investors ahead of the last trading session of the year. "Today's (Thursday's) trade relates to low volume and end of the year adjustments... Plus the dollar has retreated," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.

"There's more short-covering than new buying." The March cotton contract on ICE Futures US hit a session high of 71.14 cents a lb, a peak since December 16. The US dollar hit a 15-day low against the yen on Thursday as traders used the quiet holiday period to take profits on the dollar's recent gains. March cotton contract on ICE Futures US settled up 0.75 cent, or 1.08 percent, at 70.5 cents per lb. It traded within a range of 69.64 and 71.14 cents a lb, the highest level since December 16.

Total futures market volume rose by 7,560 to 17,971 lots. Data showed total open interest fell 1,541 to 242,268 contracts in the previous session. The dollar index was down 0.59 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.07 percent. The US exports sales data from the US Department of Agriculture is due on Friday.

Copyright Reuters, 2016