Cotton gains on crop damage worries due to Hurricane Hanna
- Prices have gained for a second straight session, despite the United States Department of Agriculture's weekly crop progress report on Monday showing 49%.
- It's coming to the realization that one report does not make a season, so there's still some damage to the Corpus Christi crop because of Hurricane Hanna.
ICE cotton futures edged higher on Tuesday on concerns of crop damage in major growing regions in the United States due to unfavorable weather conditions and Hurricane Hanna.
Cotton contracts for December rose 0.20 cent, or 0.3%, to 61.36 cents per lb by 1:32 EDT (1732 GMT).
Prices have gained for a second straight session, despite the United States Department of Agriculture's weekly crop progress report on Monday showing 49% of the crop was in good/excellent condition, compared with 47% a week ago.
"It's coming to the realization that one report does not make a season, so there's still some damage to the Corpus Christi crop because of Hurricane Hanna," said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
"And there's still some unaccounted damage to the west Texas crop because of the hot and dry conditions."
Cotton farmers have been struggling with a heat wave since early June in top growing states, while Hanna, the first hurricane of the 2020 Atlantic season, left a trail of destruction along the Texas coast during the weekend.
Capping cotton's advance, meanwhile, the dollar bounced back from a two-year trough, making commodities priced in the greenback expensive for holders of other currencies.
Investors also kept a close eye on the deteriorating ties between the top exporter of the natural fiber, the United States and top consumer, China, after both countries vacated their consulates in Chengdu and Houston, respectively.
"Sour relations between the US and China continue to cause jitters regarding the only consistent recent taker of US cotton," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Total futures market volume fell by 13,735 to 8,977 lots. Data showed total open interest fell 1,382 to 174,320 contracts in the previous session.
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