Concerns mounted for cotton farmers on the US East Coast on Thursday as Hurricane Joaquin strengthened, prompting a price jump and raising the prospects of damage to crop quality and further harvesting delays for an already late crop. Any rains from the storm would come just as farmers were preparing to harvest, preventing them from getting out in the fields to pick cotton, and would risk darkening the color on bolls that have opened, reducing the crop's value.
December cotton futures on ICE Futures US rose as much as 1 percent on Thursday before settling up 0.3 percent at 60.60 cents a lb, as the storm intensified into a major category 4 hurricane and was expected to become more powerful, the National Hurricane Center said.
"This one is going to be dumping rain - it's too close to the coast not to," said Peter Egli, director of risk management at British merchant Plexus Cotton. "The storm is coming along, and so we build a bit of a premium." As the storm battered the Bahamas with rains, it was still uncertain if it would hit the US East Coast. An NHC map showed Joaquin's path potentially hitting the coasts of cotton-producing states North Carolina and Virginia by Monday morning. "There's nothing good going to come out of that," Michael Quinn, president and chief executive officer of Carolinas Cotton Growers Co-operative, said of the possibility of landfall, noting that there was little farmers could do at this point besides "pray the storm goes out to sea and stays away."