Associated Press

Cotton prices rose Wednesday on the prospect of tighter supplies over the next few months.

The U.S. Agriculture Department said Tuesday that it expects U.S. cotton stockpiles to total 3.4 million bales by the end of July. The estimate was 500,000 bales less than the agency's March forecast but nearly 31 percent more than inventories at the end of July 2011.

Export demand has been strong in recent weeks which also encouraged investors, Vision Financial Markets LLC analyst Boyd Cruel said.

Most analysts believe global supplies will be more plentiful after this summer's crop is harvested. Long-term, demand appears weak.

Cotton for May delivery rose 1.65 cents, or nearly 2 percent, to finish at 91.38 cents per pound. The price has fallen 58 percent since hitting $2.15 per pound in March 2011 when global supplies were tight and demand was robust.

In other trading, natural gas fell below $2 for the first time in more than a decade as production has boomed and supplies have expanded during the mild winter. Natural gas dropped 4.7 cents to end at $1.984 per 1,000 cubic feet.

Questions about future global economic growth kept pressure on prices for most commodities. Volumes were light, said Spencer Patton, founder of the hedge fund Steel Vine Investments LLC.

Concerns lingered about Europe's financial problems, China's slower growth and the U.S. job market. Many investors wondered if demand would grow weaker for materials, such as copper and cotton, if the global economy slows.

Gold for June delivery fell 40 cents to finish at $1,660.30 an ounce and May silver declined 15.8 cents to $31.521 an ounce.

May copper dropped for a third consecutive day, ending down 1.05 cents at $3.6395 per pound. June palladium fell 25 cents to $636.60 an ounce and July platinum fell $9.40 to $1,584.30 an ounce.

In May agricultural contracts, wheat rose 2.25 cents to finish at $6.28 per bushel, corn increased 1.25 cents to $6.36 per bushel and soybeans fell 4 cents to $14.22 per bushel.

Benchmark crude rose $1.68 to end at $102.70 per barrel on the New York Mercantile Exchange. Heating oil increased 1.92 cents to finish at $3.1149 per gallon and gasoline futures ended up 4.59 cents at $3.2955 per gallon.

Copyright 2012 The Associated Press.

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