Sept 19 (Reuters) – ICE cotton futures edged down on Tuesday after a federal report on Monday showed less-than-expected damage to the natural fiber caused by storms in the top cotton producing areas of the United States.
The cotton contract for December settled down 0.23 cent, or 0.33 percent, at 69.27 cents per lb. It traded within a range of 68.81 and 69.87 cents a lb.
The U.S. Department of Agriculture’s weekly crop progress report on Monday showed 61 percent of the crop was in good or excellent condition against 63 percent a week ago. Georgia’s crop stood at 31 percent poor to very poor condition compared with 8 percent in the previous week and 14 percent crop in Texas was rated poor to very poor, the report said.
“So basically it is reflecting the damages from the storms (Irma and Harvey) but it is still quite a bit better than what people might had expected a couple a days ago,” said Gabriel Crivorot, analyst at Societe Generale in New York. “It is better than the worst case prediction and a little bearish… the damage was offset by yield increase in West Texas.”
Prices on Monday posted its biggest one-day percentage rise in nearly two weeks.
“Yesterday’s crop condition ratings for Georgia and the potential for damage to U.S. eastern seaboard cotton fields from Hurricane Mariaare likely behind the market’s recently found support,” said Louis Rose, co-founder and director of research and analytics at Rose Commodity. “At this time, the greatest threat to U.S. cotton fields from strengthening hurricane Maria seems to be along the eastern seaboard production areas within North Carolina, South Carolina and Virginia,” Rose added.
Hurricane Maria intensified and regained its Category 5 hurricane strength on Tuesday as it churned about 140 miles (225 km) west of Guadeloupe, the U.S. National Hurricane Center (NHC) said. It was carrying maximum sustained winds of 160 miles per hour (260 km per hour), the NHC said, describing Maria as “potentially catastrophic.”
The overall weakness across the commodities complex also weighed on the prices of the fiber. The Thomson Reuters CoreCommodity CRB Index , which tracks 19 commodities, was down 0.63 percent.
Total futures market volume fell by 5,621 to 16,031 lots. Data showed total open interest fell 2,293 to 239,663 contracts in the previous session.
Elsewhere, cotton producing regions in central India, the top cotton producing and second largest cotton exporting country, are set for a recovery in rainfall levels, the country’s weather office chief told Reuters on Tuesday, easing concerns for farmers who are betting on the fibre amid rising demand.