May 11 (Bloomberg) -- Cotton prices rose, extending a rally to the longest in 32 years, on concern that rain along the Mississippi River Delta may delay planting of the U.S. crop.

The northern delta, which includes northeast Arkansas, northwest Tennessee and southeastern Missouri, had 10 inches (25 centimeters) to 15 inches of rain in the past 60 days, up from 8 inches to 10 inches normally, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. More rain in the next week may slow field work, he said.

“We are just seeing speculative buying in cotton and more rain raising the possibility of flooding,” said Hibbie Barrier, a director at Avondale Futures Group in Nashville, Tennessee. “It’s a combination of the perception that the economy is rebounding and the fear that acreage is going to be down.”

Cotton futures for July delivery rose 0.69 cent, or 1.2 percent, to 60.54 cents a pound on ICE Futures U.S. in New York. The price rose for the ninth straight session, the longest rally since June 1976. Earlier, the price reached 60.72 cents, the highest for a most-active contract since Sept. 26.

“Every day, you get a new high,” Barrier said.

The U.S. will plant 8.81 million acres of cotton this year, down from 9.47 million in 2008, in a shift to more grains and soybeans, the U.S. Department of Agriculture said on March 31.

As of May 3, Arkansas planted 25 percent of its crop, below the five-year average of 32 percent, USDA data showed. Missouri sowed 17 percent, below the five-year average of 37 percent.

Hedge Funds

Hedge funds and other large speculators doubled their net- long cotton positions in the week ended May 5, U.S. Commodity Futures Trading Commission data showed on May 8.

Speculative long positions, or bets prices will rise, outnumbered short positions by 19,246 ICE contracts, the most since July 2008.

Cotton prices have gained 24 percent this year, partly on speculation that the economy will recover.

The U.S. recession may have ended last month, Barry Knapp, a strategist at Barclays Capital, said in a report on May 8.

In April, consumer confidence rose by the most in more than two years as surging stock prices and falling mortgage rates boosted optimism. A gauge of U.S. manufacturing activity had its biggest bounce since 2005 as companies eased up on efforts to slash inventories.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net.

Last Updated: May 11, 2009 16:02 EDT