NEW YORK: ICE cotton futures rose to their highest since the first week of March on Tuesday, tracking strength in grains markets.
Cotton contracts for July were up 1.89 cents, or 2.1%, to 91.11 cents per lb by 12:10 EDT (1610 GMT), having hit their highest since March 2 earlier in the session.
Cotton prices got a fillip from other grains, which are in a “very, very bullish situation,” with looming inflation adding support to the natural fiber, Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago, said.
“If corn is going to run, wheat is going to stay in lockstep, and that means cotton is going to come over,” Marcus added.
Chicago corn, wheat and soybean futures extended a rally on Tuesday to eight-year highs, supported by corn supply worries as adverse weather cast doubt over harvest prospects in top exporters the United States and Brazil.
A decline in weekly US wheat crop ratings also kept the focus on weather risks for northern hemisphere wheat.
These gains in cotton are not sustainable and “come May, you will see these prices top out a little bit,” Marcus said.
The US Department of Agriculture’s weekly crop progress report on Monday showed 12% of the total 2021 cotton crop was planted in the week ending April 25, just over the five-year average of 11%.
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