Cotton Surges by Exchange Limit on Concern Rain May Hurt Australian Crops
Cotton jumped the most allowed by ICE Futures U.S. on concern that wet weather may limit supplies from Australia, the world’s fourth-largest exporter. Orange juice also gained.
Australia’s Bureau of Meteorology prediction for April to June showed an “emerging risk” that rain may erode the quality of the cotton crop and hamper the harvest that will start this month, said Tracey Allen, an analyst at Rabobank Australia Ltd. in Sydney. Prices have more than doubled in the past 12 months as surging global demand outpaced shrinking supplies.
“News from Australia is positive for the market,” said Andy Ryan, a senior risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee. “There is some buying by textile mills.”
Cotton for May delivery jumped by the limit of 7 cents, or 3.5 percent, to settle at $2.0596 a pound at 2:39 p.m. on ICE in New York. The fiber increased by the maximum for the third time in four sessions. The most-active contract rose to a record of $2.197 on March 7.
The U.S. is the biggest exporter, followed by India and Uzbekistan.
Orange-juice futures for May delivery rose 0.15 cent, or 0.1 percent, to $1.582 a pound. Earlier, the price touched $1.531, the lowest since Dec. 2.
To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net; Chris Prentice in New York at Cprentice3@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
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