KANSAS CITY (Dow Jones)--Cotton futures spiked to their highest in 15 years
amid uncertainty surrounding India's exports and weather issues in China, with
global stockpiles of the fiber running at multiyear lows.

Wednesday, cotton for nearby October delivery notched a 15-year peak of 94.00
cents, but closed down 0.98 cent, or 1%, to 92.81 cents a pound on ICE Futures
U.S. in New York. Most active December topped out at a 15-year high of 95.79
cents a pound, but it fell 0.88 cent, or 0.93%, to 93.62 cents.

Cotton futures fell from their early highs as traders took profits and as the
strong commodity fund buying that helped take prices to their peaks ebbed for
the time being.

The Indian government announced Tuesday it would delay registrations for
cotton exports to Oct. 1, which were scheduled to commence Wednesday, throwing
doubt into an already unstable market where textile mills are scrambling for
supplies ahead of an expected large U.S. harvest.

"I believe what they're trying to do is buy some time...until the weather
clears out, harvest gains steam and the situation resolves itself once cotton
is moving more freely," said Sharon Johnson, chief cotton analyst at First
Capitol Group in Atlanta.

Traders say India's textile industry is lobbying for more restrictive export
measures, and the delay would allow the government more time to consider the
measures. The government has previously announced that it will limit shipments
to 5.5 million bales in the upcoming crop year beginning Oct. 1, and will fix
prohibitive taxes on exports above that level.

India's textile mills are concerned there won't be enough cotton to meet
textile mill demand and that tight supplies will raise domestic prices as world
cotton prices soar to 15-year peaks.

In August, the government estimated the Indian crop at a record 32.5 million,
170-kilogram bales for 2010-11, though the textile industry expects output to
be lower.

India's cotton fields have been hit by wet weather, which has delayed the
harvest and could lead to quality issues if the fiber has soaked up too much
precipitation. Recent dry, clear conditions, however, may alleviate those
concerns and speed the onset of the harvest, traders say.

Cotton futures have also soared after Pakistan's crop has been slashed by
about 17% owing to devastating floods.

Wet weather in China, the world's largest producer and importer of cotton,
has also created quality concerns on a portion of its crop. Last week, the U.S.
Agriculture Department trimmed its estimate of the Chinese crop by 500,000
bales. It also reduced its projection for Pakistani output by 200,000 bales.

Global cotton stocks, projected at 45.44 million, 480-pound bales, are at
their lowest point in nearly 16 years.

The Indian and U.S. crops will begin to replenish global supplies, but
continued strong demand for the fiber is expected to hold stocks at relatively
tight levels.

U.S. 2010-11 cotton production is pegged at 18.84 million bales, up 55% from
last season, as farmers planted more of the fiber in reaction to higher prices.
The U.S. is expected to export 15.5 million bales, up from 12.1 million last
year, the USDA said.

There are signs that high prices are beginning to filter their way to the
consumer. London-based Next PLC (NXT.LN) said Wednesday its clothing prices are
set to rise by 5% to 8% in the spring of 2011, owing to inflationary pressures
and the spike in cotton prices.

Cotton prices could top out at the key $1 area if commodity funds continue to
buy, said Boyd Cruel, senior softs market analyst at Vision Financial Markets
in Chicago. The last time cotton traded above $1 a pound was March 5, 2008,
when deferred contracts reached this level. Front-month futures haven't
breached $1 since July 7, 1995.