NEW YORK: ICE cotton futures climbed to their highest in nearly 18 months on Monday, driven by freezing weather conditions in major growing regions in the United States and concerns over further crop damage from Tropical Storm Zeta.
The cotton contract for December rose 0.98 cent, or 1.4%, at 72.27 cents per lb by 1:27 p.m. EDT (1727 GMT). The front-month contract hit its highest since May 7, 2019 at 72.35 cents.
"There is a front with snow, ice and sleet over the south-western cotton and there's this really weak hurricane that may come up into the Louisiana area," said Rogers Varner, president of Varner Brokerage in Cleveland.
"It's just been one storm after another, it has delayed the harvest, taken some quantity and quality off the crop, so that's why the market is stronger."
Temperatures in Texas will drop back below freezing and many places will see a transition to more wintry precipitation, the National Weather Service said https://www.weather.gov/maf.
Tropical Storm Zeta is forecast to approach the Gulf Coast on Wednesday, with increasing risk of storm surge, rainfall, and wind impacts from Louisiana to the Florida Panhandle, the National Hurricane Center said.
Data on Friday showed, speculators increased their net long position in cotton futures in the week to Oct. 20 by 6,476 contracts to 62,454.
"There is no doubt, cotton has been on a tear for over a month," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note. "The market is certainly overbought, but such can continue for a significant span of time, especially with finishes like Friday's relieving some of the market's overbought condition."
Cotton futures on Friday posted their biggest one-day fall in over a month.
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