CHICAGO: ICE cotton futures firmed on Wednesday on concerns that a weather disturbance developing in the U.S. Gulf of Mexico could hurt harvests in key regions, with crop conditions already downgraded in a weekly federal report.
Cotton contracts for December climbed 0.42 cent, or about 0.5%, to 94.47 cents per lb, by 12:14 p.m. EDT (1614 GMT), and were up for a fourth consecutive session.
Prices will be supported by the weather conditions in the Gulf of Mexico that are “going to bring a lot of rain to the Georgia crop, and we don’t need anymore rain as crops are already suffering,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
The U.S. National Hurricane Center said on Tuesday a system, that is currently over the central and eastern Gulf of Mexico, could form a tropical or subtropical depression as it nears the northern Gulf coast on Wednesday night or Thursday.
The U.S. Department of Agriculture (USDA)’s weekly crop progress report on Tuesday showed 61% of the cotton crop was in a good-to-excellent condition in the week ending Sept. 5, down from 70% in the prior week.
The report also said 54% of Texas crop was in good-to-excellent condition last week, down from 68% in the previous week.
The downgrade in the condition of Texas crops by several percentage points is another positive for prices, Brown said.
Total futures market volume rose by 4,783 to 21,638 lots. Data showed total open interest gained 36 to 273,868 contracts in the previous session.