BLBG: Cotton Climbs on Adverse Weather in U.S.; Orange Juice Drops
Cotton jumped to the highest price in 13 months as cold, wet weather hurt U.S. crops and the dollar’s drop made the commodity cheaper for overseas buyers. Orange juice fell.
Parts of the Mississippi Delta region have received two to six times the normal amount of rain in the past week, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. The soaked area includes southern Arkansas, northern Louisiana, and interior northern and central Mississippi, he said. The U.S. is the world’s biggest cotton exporter.
“The weather continues to be horrible for cotton being harvested or just finishing its development,” said Andy Ryan, a risk-management consultant for FCStone Group Inc. in Nashville, Tennessee. “Ideal conditions right now would be sunny and dry and warm, and it’s exactly the opposite.”
Cotton futures for December delivery rose 1.41 cents, or 2.1 percent, to 67.29 cents a pound at 9:34 a.m. on ICE Futures U.S. in New York. That’s the highest price for a most-active contract since Sept. 5, 2008. Before today, cotton rose 34 percent this year on speculation that world use will top output.
The dollar fell as much as 0.7 percent against a basket of six major currencies, tumbling to a 14-month low. A weaker dollar may boost demand for raw materials priced in the currency from buyers with other monies.
About 47 percent of the cotton crop was in good or excellent condition in the week ended Oct. 11, the same as a week earlier, the U.S. Department of Agriculture said yesterday. About 12 percent of the harvest was complete.
The harvest is lagging behind the pace of previous years. The amount collected is below the 29 percent average in the past five years by this time of the season, USDA data show.
In another ICE market, orange-juice futures for November delivery fell 1.75 cents, or 1.6 percent, to $1.1115 a pound, heading for the first decline since Sept. 30. Before today, the most-active contract gained 66 percent this year on signs of constrained supplies from Florida, the world’s largest orange producer after Brazil.
