Cotton futures tumbled the most in three weeks on speculation that rain will improve crop prospects in the U.S., the world’s largest exporter.
Storms in west Texas, the largest growing region, will drop as much as 0.5" in the next five days, after "pretty good rains" yesterday, Joel Widenor, the director of agricultural services at Commodity Weather Group LLC in Bethesda, Maryland, said in a telephone interview. After the showers, drier-than-normal weather will last through July 2, leaving soil-moisture deficits, he said. Prices through yesterday rose 18 percent this year on concern output will drop.
"Excellent rains are crossing west Texas," putting pressure on prices, Sharon Johnson, a senior market specialist at Knight Futures in Roswell, Georgia, said in an e-mail.
Cotton for December delivery, after the U.S. harvest, dropped 1.4 percent to 87.76 cents a pound at 10:45 a.m. on ICE Futures U.S. in New York. A close at that price would mark the biggest drop since May 23.
In the 12 months starting Aug. 1, farmers may harvest 13.5 million bales, down from 14 million projected last month, the U.S. Department of Agriculture said on June 12. Domestic output will drop 22 percent after a drought hurt crops. The USDA also boosted its export estimate for the current season and trimmed its projection for stockpiles. A bale weighs 480 pounds, or 218 kilograms.