Forex Pros – Futures Pros – Cotton futures were up for a second day on Wednesday, as adverse weather conditions threatened crops in the U.S. and China, rekindling concerns over tightening global supplies.
On the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD1.5612 a pound during European morning trade, jumping 1.2%.
It earlier rose as much as 1.5% to a daily high of USD1.5643 a pound.
The University of Nebraska’s U.S. Drought Monitoring Center said that parts of Texas, the largest cotton-growing state in the U.S., were in extreme or exceptional drought, the most severe rankings on the university’s drought monitor index.
Meanwhile, the U.S. National Weather Service said on Tuesday that it expected violent thunderstorms across the U.S. Great Plains through Friday, with tornado warnings in effect throughout parts of Kansas and Missouri.
The U.S. Department of Agriculture said earlier in the week that approximately 57% of U.S. cotton crops were planted as of May 22, down from 59% a year earlier and below the five-year average of 61%.
Elsewhere, dry and hot conditions were forecast throughout key cotton-growing regions in central China in the week ahead, exacerbating drought conditions said to be the worst in half a century, according to local news reports.
Much of the region has seen rainfall 30% to 80% below normal in recent months, with the dry conditions raising concerns some farmers may abandon the summer planting season.
China is the world’s largest cotton producer and consumer, while the U.S. is the world’s biggest exporter of the fiber.
Elsewhere, wheat for July delivery rose 0.77% to trade at USD7.8512 a bushel, corn for July delivery climbed 0.8% to trade at USD7.3925 a bushel, while soybeans for July delivery added 0.5% to trade at USD13.7912 a bushel during European morning trade.
ForexPros.com
