NEW YORK: ICE cotton futures fell on Tuesday, as Hurricane Ida is expected to have had minimal impact on the crop despite bringing heavy rain to key growing regions.
Cotton contracts for December fell 1.42 cents, or 1.5%, to 92.81 cents per lb, by 13:28 p.m. EDT (17:28 GMT). * The December contract has gained about 3.9% so far in August, gaining for the third straight month.
While tropical depression Ida wreaked havoc and knocked out power for over a million customers in Louisiana, it did not have much of an impact in Texas, the largest cotton-growing state in the US
“For the most part, the crop seems to be pretty well spared and though there is still flooding and heavy rainfall, the worst of the damage has passed,” Bailey Thomen, cotton risk management associate at StoneX Group said, but cautioned it was still too soon to get an estimate on the damage.
Adding to concerns over increased cotton supply, the US Department of Agriculture (USDA)’s weekly crop progress report showed that 70% of the cotton crop was in a good-to-excellent condition in the week ending August 29. That compares with only 44% for the same period a year ago.
Thomen, however, said robust demand continued to provide some support to the natural fiber.
“Business has been a little bit slower in the cotton market recently but demand still seems to be healthy even as there isn’t a lot of cotton available until we get the new crop,” Thomen said.
Total futures market volume rose by 4,740 to 22,306 lots. Data showed total open interest gained 782 to 269,571 contracts in the previous session.
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