Cotton Futures Post Longest Rally in Seven Weeks

Cotton futures rose, capping the longest rally in seven weeks, on signs of lower global supplies. Sugar tumbled the most since June. Coffee dropped, while cocoa and orange juice advanced.

Cotlook Ltd., a Birkenhead, England-based research company, cut its estimate on global production in the 12 months ending July 31 by 0.6 percent, reflecting “unhealthy weather” in China, the world’s biggest producer. Above-average rain next month in southern states of the U.S., the top exporter, will slow the harvest, Commodity Weather Group in Bethesda, Maryland, said this week. India’s monsoon exceeded the 50-year average.

“Recent rains in the U.S., China and now India are reminding traders that these generally late crops are still exposed to potentially harmful weather over the coming weeks,” Peter Egli, a Chicago-based risk manager at Plexus Cotton Ltd., said in a report.

Cotton for December delivery climbed 1.4 percent to settle at 86.63 cents a pound at 2:30 p.m. on ICE Futures U.S., the biggest increase since Aug. 16. The fiber capped the fourth straight gain, the longest rally since Aug. 8.

Raw-sugar futures for March delivery sank 2.5 percent to 17.74 cents a pound, the biggest drop since June 20.

October Deliveries

Deliveries against October futures may be as much as 750,000 metric tons, compared with a seven-year average of 706,000, according to Newedge Group in New York. The currency of Brazil, the top exporter of sugar and coffee, posted the biggest weekly drop against the dollar since August, boosting incentives to sell commodities priced in the greenback.

“A large delivery may dissuade the bulls from adding to longs as homes may be needed for the sugar” from ICE contracts, Nick Penney, a senior trader at Sucden Financial Ltd. in London, said in a report.

Arabica-coffee futures for December delivery dropped 1.7 percent to $1.137 a pound, after touching $1.135, the lowest since July 13, 2009.

Cocoa futures for December delivery rose 1.6 percent to $2,639 a ton on ICE, capping its fourth weekly gain. Orange-juice futures for November delivery added 1.3 percent to $1.294 a pound.

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