Cotton futures advanced to a 10-month high after the U.S. government said global supplies will be lower than forecast a month ago. Coffee and cocoa also rose.
Demand for cotton has expanded in China, India and Bangladesh, which will leave world inventories at 81.74 million bales in the year ending July 31, down from the February estimate of 81.86 million, the U.S. Department of Agriculture said today. Global use was projected at 107.11 million bales, up from 106.24 million last month. Exports from the U.S., the top shipper, will be 12.75 million bales, up from 12.5 million projected last month, and 11.7 million a year ago. A bale weighs 480 pounds (218 kilograms).
“Both U.S. and world numbers are friendly, if not bullish, given the changes and expectations,” Sharon Johnson, a senior cotton specialist at Roswell, Georgia-based Knight Futures, said in an e-mail.
Cotton for May delivery rose 0.4 percent to settle at 86.88 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York, extending the weekly gain to 1.7 percent. Earlier, the price reached 88.78 cents, the highest since May 4.
“Unless the price is up around 91 cents, cotton’s not going to win” acreage from more-profitable crops such as soybeans, Michael Smith, president at Port St. Lucie, Florida-based T&K Futures, said in a telephone interview.
Also in New York, arabica-coffee futures for May delivery added 0.7 percent to $1.4405 a pound, the fifth increase in six sessions.
Cocoa futures for May delivery jumped 2.8 percent to $2,120 a metric ton on ICE, the biggest gain since Nov. 14. The price rose 1.8 percent this week.