Cotton Futures Jump to 15-Year High, Orange Juice Rises on USDA Estimates

Cotton futures jumped to a 15-year high after the U.S. Department of Agriculture boosted a forecast for global demand. Orange-juice prices also climbed.

Global use will increase to 120.8 million bales in the year that began Aug. 1, up 0.2 percent from last month’s estimate, the USDA said today. Worldwide output will be 116.7 million bales, down from the September forecast of 117 million. For the second straight day, cotton futures jumped 4 cents a pound, the most allowed by ICE Futures U.S.

“The bullish news was in the world numbers,” said John Flanagan, the president of Flanagan Trading Corp in Fuquay- Varina, North Carolina. “High prices are not rationing out demand yet.”

Cotton for December delivery rose 3.42 cents, or 3.3 percent, to settle at $1.0717 a pound at 2:30 p.m. on ICE New York. Earlier, the price reached $1.0775, the highest level for a most-active contract since June 19, 1995.

This week, the commodity jumped 9.3 percent, the most since mid-February. Inventories monitored by ICE tumbled 47 percent in the past three days.

The fiber is up 68 percent in the past 12 months, while stockpiles plunged 97 percent.

Output in the U.S., the world’s biggest exporter, will be 0.2 percent more than forecast a month ago after beneficial weather boosted yields in Texas and the Mississippi River Delta, the USDA said.

A bale weighs 480 pounds, or 218 kilograms.

Chinese Demand

Prices also climbed on renewed demand from China, the biggest buyer, said Gary Raines, an economist at FCStone Fibers & Textiles in Nashville, Tennessee. China’s markets opened after National Day holidays.

China is forecast to boost imports 19 percent to 13 million bales next year, the USDA said. Demand for the fiber soared after excessive rains damaged crops and delayed this year’s harvest.

The nation will produce 31.5 million bales, a 3.1 percent drop from September’s projection, the agency said.

Orange-juice futures for November delivery rose 2.55 cents, or 1.7 percent, to settle at $1.5375 a pound. Earlier, the price jumped as much as 3.6 percent.

Florida, the second-biggest orange grower, will produce 146 million boxes in the harvest getting under way, the USDA said today. The average forecast of six analysts and traders in a Bloomberg News survey was 150.7 million boxes. A box weighs 90 pounds, or 41 kilogram.

Weather Concerns

Orange output in the citrus belt in Brazil, the world’s largest producing region, may fall more than expected this year to the lowest level since 2001 as below-average rains reduce yields, Sucocitrico Cutrale Ltda. said last month.

The USDA forecast was bullish, said Stephanie Kinard, a market strategist at Chicago-based Brewer Futures Group. “We don’t really have any reserves because of what’s going on in Brazil,” she said.

Independent forecaster Elizabeth Steger in August projected Florida’s orange harvest would be 154 million boxes, while Louis Dreyfus Citrus Inc. forecast a crop of 149 million boxes.

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.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.