U.S. cotton futures surged on Wednesday for their biggest daily percentage gain since April 2011, rallying initially with other commodities and U.S. stock markets, then pushing to their four-day high as investors covered short positions, brokers said.
U.S. equity markets rose as signs of urgent moves in Europe to rescue Spain's troubled banks sparked a rebound in beaten-down shares, pushing the broad S&P 500 index through a key resistance level.
In the commodities sector, metals, energy, grains and other softs markets pushed the global benchmark Thomson Reuters-Jefferies CRB index up 1.25 percent.
"Today's market is truly a rising-tide-lifts-all-boats kind of market," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.
Commodities posted their biggest rebound in more than three months, also on growing hopes for a solution to the euro zone crisis and a stimulus measure for U.S. growth.
The CRB's biggest gain since Feb. 21 was won as a rising euro made dollar-denominated raw materials, including cotton, cheaper for users of the single currency.
For more, see: NY cotton gains most in 14 mos, commodities rally