Low Prices Spark Cotton Demand, Price Rebound

By Jim.Robinson|September 1, 2009

Bloomberg

Cotton rose to a one-week high Monday, erasing an earlier decline, on speculation that the lowest prices since June will attract buyers.

Cotton slipped 0.5 percent in August, the first monthly decline since February, and last week touched 57 cents a pound in New York, the lowest price since June 30. The fiber has jumped 22 percent this year on speculation that a slowdown in global production was outpacing declines in demand.

“We’re down at price levels where mills are happy to buy cotton,” said Ron Lawson, a managing director at Lawson/O’Neill Global Institutional Commodity Advisors LLC in Sonoma, California. “The market is hypersensitive to any buying because of a comparative lack of free supply.”

Cotton futures for December 2009 delivery rose 1.4 cents, or 2.4 percent, to 59.74 cents a pound on ICE Futures U.S. in New York, after touching 59.79 cents, the highest since Auguust. 24. Earlier, the contract fell as much as 1.5 percent.