NEW YORK: ICE cotton futures jumped on Wednesday to the highest price in more than seven months, due to concerns about likely crop damage from Hurricane Delta, while gains in the grains market further supported the natural fibre.
Cotton contracts for December rose 0.80 cent, or 1.2%, to 67.66 cents per lb by 1:07 p.m. EDT (1707 GMT).
The contract has gained for a third straight session, having touched its highest since Feb. 24 at 67.83 earlier.
“Looks like Delta is going to be hitting most of the cotton growing regions in the south and unfortunately harvest has begun, but has not progressed very far. So, there are a lot of open bolls that are susceptible to damage,” said Bailey Thomen, cotton risk management associate with StoneX Group.
A Hurricane Watch has been issued for the northern Gulf Coast from High Island, Texas, eastward to Grand Isle, Louisiana, due to Delta, the US National Hurricane Center said.
Also supporting the market, US wheat and soybean futures jumped to multi-year highs on Wednesday as unfavourable weather threatened production in exporting countries.
Market participants are currently looking out for the US Department of Agriculture’s (USDA) monthly World Agriculture Supply and Demand Estimates (WASDE) report, due on Friday.
“We could reasonably see a decrease in production on the US side, since we have seen several tropical storm and hurricane come through and damage some of the production,” Thomen added.
Total futures market volume fell by 4,802 to 21,414 lots. Data showed total open interest gained 666 to 226,996 contracts in the previous session.
Certificated cotton stocks deliverable as of Oct. 6 totalled 19,789 480-lb bales, up from 17,875 in the previous session.Reuters
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