ICE cotton gained on Tuesday, propped up by fears of crop damage in South Texas from a potential storm in the region, even as department of Agriculture data showed strong crop progress in the natural fibre growing regions. "Prices might go a little bit higher over the next two days with the hurricane coming in, but I don't see the market (sentiment) changing at all," said Peter Egli, director of risk management at British merchant Plexus Cotton.
A system associated with the remnants of former tropical storm Harvey, located over the Yucatan Peninsula, has a 90 percent chance of developing into a cyclone over the next two days, the National Hurricane Center (NHC) said on Tuesday. A tropical depression is expected to form over the southwestern Gulf of Mexico on Wednesday or Thursday and move in the general direction of the Texas coast on Friday, the Miami-based center added.
Cotton contracts for December settled up 0.25 cent, or 0.37 percent, at 67.81 cents per lb. It traded within a range of 67.35 and 67.94 cents a lb, its highest in a week and rose for a fourth straight session. "I think we're in a trading range for now, but in the long term, it looks a bit bearish," Egli noted.
The US Department of Agriculture's weekly crop progress report on Monday showed 63 percent of the crop was in good or excellent condition against 61 percent a week ago. Total futures market volume rose by 1,169 to 12,246 lots. Data showed total open interest gained 1,015 to 225,345 contracts in the previous session. Certificated cotton stocks deliverable as of August 21 totalled 13,520 480-lb bales, down from 13,983 in the previous session.