A tropical storm making its way across portions of the U.S. could dampen outlooks for cotton supplies this year. Parts of the southeast are dealing with heavy rains from the remnants of Tropical Storm Fred this week.
Cotton futures reached close to contract highs on Monday as the supply concerns grew about the impact of Tropical Storm could have on cotton production this year, that’s as the storm is predicted to bring rain to some key-cotton growing regions.
The production concerns came just days after USDA made unexpected cuts to its forecast for this year’s cotton crop, trimming both yield and production.
USDA says the U.S. is still expected to be about 17-and a quarter million bales, up 18% from last season.
But when you factor in the low beginning stocks and the protected use levels along with world demand, USDA penciled in a projected price of 80-cents a pound, up 13 cents from last year.
“It’s just been reflecting strong prices that we’ve seen in futures markets recently, and, and even globally the cotton ‘a and x’ prices above a dollar a pound, and all of this is, you know, really indicative of good demand globally,” says Mark Jekanowski, chairman of USDA Outlook Board.
USDA Chief Economist Seth Meyer calling the news about cotton “pretty fantastic”.
