Cotton Drops as World Inventories May Climb; Orange Juice Falls

Cotton futures fell, capping the third decline in four sessions, on speculation that global supplies will be more than sufficient to meet demand. Orange juice dropped for the first time in a week.

Global inventories of cotton on July 31, 2014, will climb 9.4 percent from a year earlier to a record 92.74 million bales, the U.S. Department of Agriculture said May 10. A bale weighs 480 pounds, or 218 kilograms. The International Cotton Advisory Committee on May 1 boosted its inventory forecast for next year by 11 percent from a month-earlier estimate.

“There’s a lot of surplus you’ve got to go through,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “It looks like we’re going to have some big crops.”

Cotton for July delivery slumped 0.5 percent to close at 86.45 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York. Prices are up 15 percent this year.

Orange-juice futures for July delivery dropped 1.5 percent to $1.4645 a pound on ICE. Prices rallied 7 percent in the five sessions through yesterday. Futures may have “gotten ahead of themselves,” Smith said.

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