Cotton futures rose to a two-week high as dry weather compounds drought conditions in Texas, the largest grower in the U.S.
West Texas, the biggest cotton-growing region, will be hotter and drier than normal for the next two weeks, with temperatures as high as 100 degrees Fahrenheit (38 Celsius) on July 12, according to Commodity Weather Group LLC in Bethesda, Maryland. The U.S. Department of Agriculture on June 12 cut its domestic crop forecast by 3.6 percent to 13.5 million bales, citing wider damage from a drought in Texas.
"Rain is elusive across areas of the Southwest," where soil moisture has evaporated, Sharon Johnson, a senior market specialist at Knight Futures in Roswell, Georgia, said today in an e-mailed report. "The U.S. crop will likely be smaller than June projections by several hundred thousand bales, if not closer to 1 million bales, unless Southwest precipitation immediately improves, and by a considerable amount, the next several weeks."
Cotton for December delivery rose 0.1 percent to 85.1 cents a pound at 11:52 a.m. on ICE Futures U.S. in New York, after touching 85.95 cents, the highest for a most-active contract since June 20.
The USDA predicted last month that output would tumble 22 percent in 2014, compared with a year earlier. The U.S. is the world’s largest exporter of the fiber. A bale weighs 480 pounds, or 218 kilograms.