Cotton Futures Decline on Demand Concerns; Orange Juice Advances
Cotton futures fell on concern that demand will ebb amid signs of slowing economies. Orange juice increased.
Japan’s government today downgraded its assessment of the world’s third-biggest economy for the first time in 10 months, the Cabinet Office said in a monthly report released in Tokyo. Risks include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” according to the report.
“A slower world economy has a negative impact on cotton, as purchases can be delayed, unlike food commodities,” Sid Love, the president of Joe Kropf & Sid Love Consulting in Overland Park, Kansas, said in an e-mail.
Cotton for December delivery dropped 0.7 percent to settle at 75.62 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York.
China, the world’s biggest cotton user, may sell about 1 million metric tons from stockpiles and release 400,000 tons of import quota to help textile companies cope with increased raw- material costs and weak export demand, said Dong Shuangwei, an analyst at Beijing Capital Futures Co.
Hurricane Isaac may bring heavy rain to the lower Mississippi Valley and cut the quality of the cotton crop in the region. Flooding from storm surge and rainfall is expected, according to the National Hurricane Center in Miami. The U.S. is the world’s biggest exporter of the fiber.
“In the short run, possible damage from Isaac is a support,” for prices, Love said.
Orange-juice futures for November delivery rose 0.2 percent to $1.14 a pound in New York, the first gain in four sessions.
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