Cotton Prices Increase as U.S. Output Shrinks
Post Date: 21 May 2013 Viewed: 361
otton futures rose the most in a week amid declining output in the U.S., the world’s biggest exporter. Orange juice and cocoa advanced, while coffee fell.
Cotton production may fall 19 percent this year, the U.S. Department of Agriculture said on May 10. World stockpiles will rise 9.4 percent to a record in the year starting Aug. 1 with most of the gain in China, the biggest user. The "overhang" probably won’t affect world prices if China maintains reserves, said John Flanagan, the president of Flanagan Trading in Fuquay- Varina, North Carolina.
"I don’t really see any reason for the market to sell off," Flanagan said in a telephone interview. "As long as China is willing to hold their prices high, there’s no reason for us to have lower prices."
Cotton for July delivery rose 1 percent to close at 86.92 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since May 6. Earlier, the commodity climbed as much as 1.3 percent.
Orange-juice futures for July delivery increased 0.3 percent to $1.4865 a pound. The price climbed for the fifth straight session, the longest rally since Feb. 1.
Cocoa futures for July delivery advanced 1.2 percent to $2,353 a metric ton. Arabica-coffee futures for July delivery fell 1.2 percent to $1.44 a pound.