NEW YORK: ICE cotton futures hit their highest in more than a month on Friday en route to a third straight weekly gain, on growing concerns over the lack of rainfall in and around Texas.
The cotton contract for July rose 2.16 cents, or 2.55 %, to 86.80 cents per lb by 12:29 EDT (1629 GMT), a peak since March 15. It traded within a range of 84.6 and 86.94 cents a lb.
“There’s definitely a bullish environment right now. Consumption is pretty good, there’s a lot of anxiety about new crop, and the drought in Texas,” said Jordan Lea, senior trader at DECA Global. Cotton prices were up nearly 4% so far for the week.
“The situation in West Texas remains dire, as there is still no rain in the forecast. Farmers are also facing much higher input costs this season, as energy and fertilizer prices have gone up sharply,” Peter Egli, director of risk management at British merchant Plexus Cotton, said in a note dated April 22.