US cotton futures rose on Monday after seasonal buying and hedging by those fearing drought-like conditions in key growing areas in Texas. Talk of a weak Indian monsoon, which would deprive crops of badly needed moisture, could also send global cotton markets rallying in coming weeks, dealers said.
"If that's the case, that would suggest the 06/07 cotton world crop is getting off to a supremely poor start," Keith Brown, a cotton trader in Georgia, said, reacting to reports of latest weather patterns in India.
India's monsoon season was in a weak phase last week, with no certainty if rains would get to be as strong as that required for cotton production, North Carolina-based Flanagan Trading Corp said in a market commentary.
The New York Board of Trade's July cotton contract rose 0.09 cent to finish at 52.70 cents per lb, moving from 52.61 to 53.60 cents.
New-crop December jumped 0.64 to settle at 58.78 cents, in a band from 58.44 to 59.20 cents.
Brown said the market was mainly driven by "extreme intense dryness" in West Texas.
"Once we got up on the day, we began to see some rolling out of July, with people buying December and selling July because options for July expire on Friday and go into delivery on June 23," he said.
"We have a large carry forward in July cotton, so July may do little more than what's it's already done."
He added that it was normal for prices to trend higher between April and June and head down from July.
"If after July, there's no relief from the dryness, then we'll probably rally. Otherwise, we'll come back down during the fall harvest," Brown said.
The Commodity Futures Trading Commission said on Friday net non-commercial short positions in cotton fell 57 percent in the May 30 to June 6 week from May 23-30, signalling fewer investors pressuring for a lower price.
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