Cotton Drops for First Time in Four Sessions as Rain Aids Crops
India, the world’s second-largest producer, received monsoon rains about a month earlier than normal and showers have been 48 percent above a 50-year average since they arrived on June 1, according to the India Meteorological Department. West Texas, the biggest growing region in the U.S., got as much as 0.5 inch (1.3 centimeters) of rain over the weekend and as much as 1.5 inches will fall in the next 48 hours, Donald Keeney, a meteorologist at Gaithersburg, Maryland-based MDA Information Systems Inc., said in an interview.
“There were some scattered showers in West Texas, and there are more forecast for this week,” John Flanagan, president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina, said in a telephone interview. “That’s going to weigh on the December contracts, as well as the good monsoons in India.”
Cotton for December delivery fell 0.3 percent to 89.19 cents a pound at 12:17 p.m. on ICE Futures U.S. in New York. Prices rallied 5 percent in the previous three sessions, after the U.S. Department of Agriculture cut its forecast for output in domestic output.
The U.S. is the world’s largest exporter. In the 12 months starting Aug. 1, farmers may harvest 13.5 million bales, down from 14 million projected last month, the USDA said on June 12. Domestic output will drop 22 percent after a drought hurt crops. The agency also boosted its export estimate for the current season and trimmed its projection for stockpiles. A bale weighs 480 pounds, or 218 kilograms.
In India, monsoon accounts for about 70 percent of total annual rainfall, and more than 235 million farmers depend on the seasonal deluge for crop irrigation.
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