ICE July Cotton Delivery Is Highest for Month Since 2008

Cotton deliveries of 147 million pounds against the July contract on ICE Futures U.S. were the most for the month since at least 2008, exchange data showed.

Of the 2,943 contracts of 50,000 pounds (22,680 kilograms) each, Newedge USA LLC took 2,882 contracts, exchange figures showed. July futures expired on July 9 at 83.9 cents a pound. As of yesterday, cotton inventories at warehouses monitored by ICE were close to the highest in three years at 606,222 bales, or 291 million pounds.

Farmers may harvest 13.5 million bales in the year starting Aug. 1, down 22 percent from a year earlier, partly because of a drought in Texas, the biggest growing state, the U.S. Department of Agriculture said last month. The agency will update its estimate today. Cotton futures for December delivery headed for the longest rally in more than two months.

“We anticipate that with the big delivery against the July futures, a large portion of the ICE certified stocks will probably be taken out,” Michael T. Sweeney, a senior broker at Marex North America LLC in New York, said in a telephone interview. “With the U.S. crop falling and domestic supplies tightening, mills will want to get their hands on that cotton. We will know more about it today.”

In the 12 months ending July 31, 2014, U.S. stockpiles may fall 28 percent to 2.6 million bales from a year earlier, the USDA said last month.

Cotton futures for December delivery rose 0.1 percent to 86.9 cents at 11:19 a.m. on ICE in New York. The price climbed for the fourth straight day, poised for the longest rally since April 30. Through yesterday, the most-active contract climbed 16 percent this year,

The USDA will issue supply and demand data at noon. The U.S. is the world’s biggest cotton exporter. A bale weighs 480 pounds.

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