Cotton Extends Gain as Heat, Dry Spell May Hurt Crop; Orange Juice Rises
Cotton rose to the highest price this month on concern that hot, dry weather will damage U.S. crops in the Mississippi River Delta and Southeast. Orange-juice futures also rallied.
Temperatures across the Delta, the biggest U.S. growing region after Texas, were as much as 4 degrees Fahrenheit above normal in the past two weeks, said Kyle Tapley, a meteorologist at MDA EarthSat Weather Inc. in Rockville, Maryland. Rainfall was less than the average from Jackson, Mississippi, to Memphis, Tennessee, he said. The U.S. is the world’s top exporter.
“The cotton crop in the southeastern U.S. is melting,” said Keith Brown, the president of Keith Brown & Co., a brokerage in Moultrie, Georgia. “A few weeks ago, the crop was excellent, but God Almighty has turned off the faucets.”
Cotton futures for December delivery rose 0.6 cent, or 0.8 percent, to close at 76.91 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 77.44 cents, the highest level for a most-active contract since June 30. The fiber has rallied 5.4 percent since reaching a five- month low on July 20.
In the Delta, rainfall in the past two weeks totaled 1.75 inches (4.4 centimeters) in Jackson, down 0.42 inch, or 20 percent less than a 30-year average, according to MD EarthSat data. Rainfall in Memphis was 0.6 inch, or 68 percent less than the average.
Orange-juice futures for September delivery gained 0.7 cent, or 0.5 percent, to close at $1.462 a pound at 2 p.m. in New York.
To contact the reporter on this story: Jennifer A. Johnson in Chicago at Jjohnson133@bloomberg.net
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