NEW YORK: ICE cotton futures rose over 1% on Tuesday helped by a rally in the grains market, while concerns that Hurricane Delta could affect cotton growing regions provided further support.
Cotton contracts for December rose 0.86 cent, or 1.3%, to 66.89 cents per lb by 1:21 p.m. EDT (1721 GMT).
“There is a lot of strength in other commodities; grains are very strong and it is a demand-driven market and cotton falls under the same category,” said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago.
US wheat and soybean futures jumped over 2% to multi-year highs due to concerns about dry weather in key production areas.
Meanwhile, rapidly intensifying Hurricane Delta is likely to bring heavy rains to portions of the central Gulf Coast, Tennessee Valley and southeastern United States later in the week, the US National Hurricane Center said.
Cotton prices had risen to their highest since Feb. 25 to 67.14 cents on concerns of crop loss due to the storm.
Hurricane Delta could cause crop damage if it were to hit Mississippi and Alabama, where cotton bolls are open, said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
Love added, “the general expectation is that we are going to have a reduction in production.”
With the harvest underway in the United States, the US Agriculture Department’s weekly data, on Monday, showed that 17% of the cotton crop was harvested as of the week ended Oct. 4, up from 13% in the preceding week.
However, the report also showed that only 40% of cotton was in good/excellent condition, down from 43% in the preceding week.
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