US cotton futures finished at a four-week high Tuesday on investor buying as a historic drought did not let up in the key growing state of Texas during the long holiday weekend, brokers said. The cotton market was closed Monday for US Memorial Day. Forecast Telvent DTN said Texas was dry the past four days and conditions will remain just as hot and dry through the week.
"I think the weather in Texas is what really kicked (cotton's rally) off," said Mike Stevens, an independent cotton analyst in Louisiana. The benchmark December cotton futures on ICE Futures US went up the 6-cent limit to finish at $1.355 per lb, with the day's low at $1.30. It was the highest settlement for the third-position cotton contract since May 4. Based on that third-position contract, cotton posted a gain of 3.49 percent in the month of May.
Spot July cotton also went up the 6-cent limit to close at $1.5867. "The forecast chance of rain in West Texas on Sunday failed, as did the forecast chance on Monday," said a daily commentary by Flanagan Trading Corp. The worst drought in a century in Texas may force farmers there to abandon up to a third of the crop unless rains drenched the state for days soon.