NY cotton ends at 4-week top as Texas drought bites
NEW YORK: US cotton futures finished at a fresh four-week high Wednesday as a severe drought in the key growing state of Texas easily wiped out early losses from poor US economic data, brokers said.
Forecaster Telvent DTN said Texas, the biggest cotton-growing area in United States, will remain hot and dry through Sunday.
"That's what's holding it up -- this drought in Texas," said Jobe Moss, senior analyst for brokers and merchants MCM Inc in Lubbock, Texas, in the heart of the US cotton belt.
The benchmark December cotton futures on ICE Futures US went up 1.77 cents to finish at $1.3727 per lb, dealing from $1.3194 to $1.3848. It was the highest settlement for the third-position cotton contract since May 4.
Spot July cotton climbed 2.30 cents to conclude at $1.6097 per lb.
Total volume traded reached almost 26,000 lots, almost 50 percent above the 30-day norm, Thomson Reuters preliminary data showed.
Traders said some Texas farmers are coming up on deadlines to abandon their plants and just collect insurance payments.
The worst drought in a century in Texas may force farmers there to abandon up to a third of the crop unless rains start pounding the area for several days soon.
A weekly report by the Texas Agri Life extension service said most of the state continued to suffer from exceptional drought.
Copyright Reuters, 2011
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