Oct 23 (Reuters) – ICE cotton futures on Monday surged over 4 percent, its largest one day percentage gain, as freezing weather forecasts in top producing state Texas raised concerns of crop damage.
“Prices shot up due to a lot of talk about freezing weather forecasts in West Texas for Thursday and Friday night,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi, adding “these temperatures are very seasonal and normal, but the crop is light.”
Cotton contracts for December settled up 2.84 cents, or 4.25 percent, its biggest one day percentage gain, at 69.72 cents per lb. The contract traded within a range of 66.89 and 69.79 cents a lb, its highest since Oct. 10.
“My guess is that 10 percent of the crop will be unopened and is therefore at risk to a freeze, should one occur” Varner said.
Meanwhile, the U.S. Department of Agriculture’s weekly crop progress report showed 37 percent of cotton crop was harvested in the United States by the week ended Oct. 22, up from 31 percent in the previous week. It rated 56 percent of the U.S. cotton crop in good to excellent condition, down from 58 percent a week ago, the report said.
Total futures market volume rose by 28,691 to 52,958 lots. Data showed total open interest fell 125 to 228,047 contracts in the previous session.
“I think the market will top out this week on the (Texas) weather scares and move down into harvest lows,” Varner added.
Certificated cotton stocks deliverable as of Oct. 20 totaled 2,344 480-lb bales, down from 2,995 in the previous session.
(Reporting by Nithin Prasad in Bengaluru; editing by Diane Craft)