Cotton Exceeds $1 on Supply Concern
September 20, 2010 Bloomberg
Cotton futures topped $1 a pound to 101.98 for December 2010 on September 20 in New York as supplies plunged and demand increased from textile mills.
(Editor’s Update #1: At the close on September 20, December 2010 was at 99.37, up 115, and December 2011 was down .05 to 84.00.)
(Editor’s Update #2: At the close on September 21, December 2010 was up 142 point to 100.79, and December 2011 was at 84.20, up 20.)
Inventories monitored by ICE Futures U.S. have plummeted 98 percent since June 2, to 16,569 bales on September 17. China, the world’s biggest grower and buyer, may boost imports after rain hurt crop quality and output, according to five China-based analysts surveyed by Bloomberg News this month. Heavy rains soaked some open-boll cotton in its final development stage, they said.
“There is basically very little cotton right now,” said Tom Reardon, the president of Delta Brokerage in New York. Supplies will remain tight until farmers in the U.S., the world’s largest exporter, harvest their crop in late October and early November, Reardon said.
“Mills are sweating blood over both prices and shortage of supplies,” said Mike Stevens, an independent trader in Mandeville, LA. Prices are being “fueled by solid fundamental news,” he added.
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