NEW YORK: ICE cotton futures firmed on Wednesday, rising for a fourth straight session, on concerns about a potential hit to upcoming harvests from an Atlantic storm projected to strike the US Gulf coast.
Cotton contracts for December rose 0.57 cent, or 0.6%, to 94.75 cents per lb, by 12:15 p.m. EDT (1615 GMT).
The possibility of the tropical system moving into the central Texas coast is lifting prices, said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
“Just about all of that cotton is ready for harvest. So the market does not want to see that tropical storm turn into a hurricane and hit the Texas crop.”
The Miami-based National Hurricane Center (NHC) forecast that the low pressure system, now in the Caribbean, could develop into a more well-formed Atlantic storm and “move into the western Gulf of Mexico by Sunday where conditions could be favorable for additional development.”
Analysts have said that while signs of the quantity and quality of the crop this season are positive, any sudden changes in the weather in key growing regions like West Texas could pose a significant challenge to production.
Farmers in the region are harvesting as fast as they can in anticipation of a storm, Varner said, adding ‘traders love to buy cotton in front of a hurricane.”
But limiting cotton’s advance was a firmer dollar, potentially hurting demand by making cotton more expensive for buyers holding other currencies.
Total futures market volume fell by 9,674 to 11,726 lots. Data showed total open interest fell 14 to 269,446 contracts in the previous session.
Comments
Comments are closed.