Sep 16, 2020
NEW YORK: (Reuters): ICE cotton futures rose as much as 3.2% to a more than 6-month high on Monday as Hurricane Sally raised concerns of crop damage, while a lower output estimate from a federal report further supported the natural fibre.
Cotton contracts for December settled up 1.81 cents, or 2.8%, at 66.62 cents per lb, after hitting the highest level since Feb. 25 at 66.87 cents per lb.
“The market is being driven higher by a positive carryover from Friday’s report, USDA cut the crop dramatically,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia. “And then this Hurricane Sally is about to hit the Delta area and could disrupt some yield with rain and wind,” Brown added.
Hurricane Sally was meandering over the north-central Gulf of Mexico, forecast to approach southeastern Louisiana later in the night and make landfall on Tuesday.
Last week, the US Department of Agriculture (USDA) lowered its 2020/21 US cotton production estimate by 1.0 million bales to 17.1 million and world output by more than 300,000 bales in its monthly supply and demand report. However, the World Agriculture Supply and Demand Estimates (WASDE) report also slashed exports for the US 2020/21 crop.
Advancing the natural fibre’s gains, the US dollar slipped on Monday, making commodities priced in the US unit, like cotton, cheaper for holders of other currencies. Investors now eye the USDA’s weekly crop progress report due later in the day. Total futures market volume rose by 20,219 to 38,909 lots.—Reuters (Source: Business Recorder)