US cotton jumped 4 percent on Friday, hitting a new lifetime peak for its benchmark futures after an 18-year low estimated for plantings. The US Department of Agriculture estimated the upland cotton area for 2007 at 10.760 million acres - the lowest since 1989 and down from analysts' projections of 11.5 million to 11.6 million acres for the current year.
"Acres are down almost double what everyone was expecting. This is just flat out bullish," said Alan Feild, an industry commentator with the Memphis, Tennessee-based iamhedged.com.
Using an "abandonment" math that cut acreage by another 12 percent - and reducing yield estimates to 775 pounds per acre from the 814 pounds in 2006/07 - Field put production for the current season at 15.71 million bales against a previous 21.59 million bales. "That implies that ending stocks will fall to around 3.5 million bales," he said.
Stocks were estimated at 9.5 million bales at the start of the 2006/07 season. Benchmark December cotton on the New York Board of Trade settled up 1.70 cents, or 2.76 percent, at 63.33 cents a lb. It had jumped 4.5 percent earlier to a life-of-contract high of 64.40 cents. The session low was 62.80.
Since Tuesday's close, NYBOT's December cotton has jumped 3 percent, energised by predictions that the USDA will cut planting estimates this week On IntercontinentalExchange's NYBOT electronic cotton market, the December contract was up 1.77 cents, or 2.87 percent, at 63.40 cents by 4:15 pm EDT (2015 GMT). Back months on NYBOT's cotton complex closed up 0.95 cent to 1.90 cents. Open interest fell 1,351 lots to 200,100 lots as of Thursday.
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