Cotton Reaches 10-Month High on U.S. Exports and Chinese Demand

Cotton rose to a 10-month high in New York on stronger U.S. exports stoked by Chinese demand and on speculation planting may decline as the fiber competes with corn and soybeans for acreage.

U.S. exports of upland cotton since the start of August reached 6.77 million bales as of March 7, up from 5.59 million bales a year earlier, the U.S. Department of Agriculture reported today. Weekly net sales of upland cotton were 187,561 bales, up from 150,083 bales in the week through Feb. 28, USDA data show.

“While prices have increased on expectation that U.S. acreage in 2013-14 will go down, U.S. export numbers have been bullish too,” analysts at Mumbai-based Kotak Commodity Services Ltd. wrote in a report today. “The nearby scenario will continue to be supported by China buying.”

Cotton for delivery in May jumped 1.7 percent to $0.9012 a pound on ICE Futures U.S. in New York at 9:37 a.m. local time. Prices reached $0.9039, the highest since April 30, and are up 20 percent this year.

The U.S. last week cut its outlook for global cotton supplies at the end of July on expanding demand in China, India and Bangladesh. Ending stocks were projected at 81.74 million bales, down from a February estimate of 81.86 million.

China is the world’s biggest cotton grower and consumer. The Asian country may use 36 million bales in the current crop year, according to the USDA, compared with projected consumption of 35.5 million bales in February.

The global cotton area may decline 8.7 percent to 31.3 million hectares (77.3 million acres) in the 2013-14 season as farmers switch to more profitable oilseeds and grains, researcher Oil World wrote in a report this week.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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