Cotton Rises to 20 Month High
February 25, 2010 By Debarati Roy
Bloomberg
Cotton futures rose to the highest level in almost 20 months on speculation that production will fail to keep pace with demand.
U.S. cotton exports in the first six weeks of this year were 93 higher than in 2009, Department of Agriculture figures show. World consumption of the fiber will climb 4.9 percent to 115.5 million bales in the year through July, the USDA said on Feb. 9. U.S. stockpiles were projected to reach 3.3 million bales, the lowest since 2004.
Cotton futures for May delivery rose 0.07 cent, or 0.1 percent, to 79.77 cents a pound on ICE Futures U.S. in New York. Earlier, the most-active contract reached 80.1 cents, the highest level since June 30, 2008, after falling as much 1.2 percent.
“The fundamentals are very strong, so cotton will continue to find support in the long run,” said Mike Stevens, an independent trader in Mandeville, Louisiana. “People took today’s intraday dip as an opportunity to take fresh positions.”
Last year, futures jumped 54 percent as adverse weather hampered the U.S. harvest and damaged crop quality. The fiber has gained 16 percent this month.
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