Cotton Falls on Bigger India-Crop Forecast: Orange-Juice Futures Decline
Cotton dropped the most in a year in New York, plunging the exchange limit, after India, the second-largest grower and exporter, said its crop will be bigger than a trade association predicted. Orange Juice fell.
Sharad Pawar, India’s farm minister, said yesterday that production may be “slightly” higher than the 34.5 million bales estimated by Cotton Association of India. Exports will resume Nov. 1, Rita Menon, secretary in the textiles ministry, said yesterday, a month later than the industry expected. Shipments were halted in April to cool domestic prices.
“The Indian crop is huge and getting bigger, and their political situation has been a real yo-yo,” said Rogers Varner, the president of brokerage Varner Bros. in Cleveland, Mississippi.
Cotton for December delivery plunged by the exchange maximum of 4 cents, or 3.8 percent, to settle at $1.0124 a pound at 2:44 p.m. on ICE Futures U.S. in New York, the biggest decline since Sept. 25, 2009. The fiber reached a 15-year high of $1.064 yesterday and has soared 65 percent in the past year.
“Once India put their cards out on the table, the market’s subsequent weakness told the story,” Mike Stevens, an independent trader in Mandeville, Louisiana, said in an e-mailed note. “There is a good chance we have set the high end of a possible consolidation range.”
Indian Exports
India will export 5 million bales in the year that began Aug. 1, compared with 6.55 million last year, the U.S. Department of Agriculture forecast on Sept. 10. For now, exports will be capped at 5.5 million bales, Pawar, the farm minister, said yesterday. The limit will be reviewed in mid-December, he said.
A bale in India weighs 170 kilograms (375 pounds. The U.S. Department of Agriculture uses a different measure, a 218- kilogram bale (480 pounds).
Orange juice fell for a second straight day on reduced concern that Tropical Storm Nicole will damage fruit groves in Florida, the second-largest citrus producer after Brazil.
The storm, which was over Cuba earlier today, is expected to skirt south of Florida and bring heavy rains to the Bahamas as it moves between the islands and Miami, according to the National Hurricane Center.
“It’s really not going to be too much of a threat,” said Joel Widenor, the director of agriculture services at Commodity Weather Group LLC in Bethesda, Maryland. The winds, recently measured at about 40 mph (64 kilometers per hour), won’t be strong enough to knock oranges off of trees, he said.
Orange-juice futures for November delivery slumped 3.6 cents, or 2.3 percent, to settle at $1.5225 a pound at 2 p.m. in New York, after falling to $1.482, the lowest level for a most- active contract since Sept. 17. The commodity has gained 8.4 percent this month.
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
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