Feb. 10 (Bloomberg) -- Cotton futures climbed to a record for the second straight day after a report showed strong demand for fiber from the U.S., the biggest exporter.
U.S. export sales rose 26 percent in the week ended Feb. 3 from a week earlier, the Department of Agriculture said today. Global output will be 115.25 million bales in the year ending July 31, down 0.2 percent from a January forecast, with demand at 116.55 million, the USDA said yesterday. Prices have more than doubled in the past 12 months.
“The future prices are being pushed up by physical demand,” said Andy Ryan, a senior risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee. “We could see usage being rationed because of scarcity and not because of prices, as China is consuming whatever they are able to buy.”
Cotton for March delivery jumped 3.9 percent, gaining the exchange limit of 7 cents, to settle at a record of $1.8758 a pound on ICE Futures U.S. at 3:16 p.m. in New York. The fiber also rose 7 cents yesterday before closing up 5.29 cents. The commodity has surged 12 percent this week.
Output this year in Central Asia will be 7.02 million bales, down 2.1 percent from last month’s projection, the USDA said yesterday. A bale weighs 480 pounds, or 218 kilograms.
“Yesterday’s USDA report was confirming current tight supply amid a steady increase in demand from China,” said Baek Youn Min, a broker for agricultural products at Korea Exchange Bank Futures Co. in Seoul.
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