NEW YORK: ICE cotton futures steadied on Wednesday after soaring to a more than seven-year peak in the previous session, as traders reassessed crop conditions in the wake of a storm that brought rain to some key cotton-growing regions.

The cotton futures contract for December was little changed at 94.92 cents per lb, by 1:23 p.m. Prices hit their highest since March, 2014 at 96.71 on Tuesday.

Tropical depression Fred has brought heavy rainfall to parts of Georgia, Virginia, the southeast and mid-Atlantic, which analysts say could affect the crop as most of the cotton growing belt has already received a lot of rain.

Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi, described it as a mixed event - neither too damaging nor helpful for the crop - and said traders were still assessing how much cotton would be produced this year.

“The big issue is whether the USDA was correct in cutting the Texas production so severely last week because the crop index reports suggests this is the best crop in years, so there’s a real theoretical argument as to what is correct,” he added.

The US Department of Agriculture’s (USDA) weekly crop progress report on Monday showed that about 67% of the cotton crop was in good to excellent condition. That was well above the level of 45% this time last year.

But the agency lowered its outlook for US production by more than half a million bales for the 2021/22 crop year in its monthly demand and supply report last week.

“With good soil moisture in mid-Aug and a later than normal arrival of autumn weather, yields could be much higher than USDA currently expects,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.

Market participants are now looking forward to the USDA’s weekly export sales report due on Thursday.