Dayanne Sousa, Michael Hirtzer and Tarso Veloso, Bloomberg News
(Bloomberg) -- Cotton prices surged to the highest in more than six months in New York after the US slashed its forecast for domestic output by more than 15%, undercutting even the lowest of analysts’ estimates for the crop’s size.
Futures for December delivery jumped as much as 3.1%, the biggest intraday gain in a month, to 88.8 cents per pound. That’s the highest price for a most-active contract since January.
The US is expected to harvest the smallest cotton crop since 2015, following drought-led losses, the Department of Agriculture said Friday in its monthly report. That’s set to tighten global supplies of the fiber at a time when imports from top consumer China are expected to rebound.
Meanwhile, prices for wheat fell in Chicago as the USDA raised its estimate for shipments from Russia. Futures for soybeans and corn also slid as the new official crop estimates mostly met analysts’ expectations.
A more favorable weather outlook for August and improving crop conditions are weighing on futures after last month’s surge, with traders adjusting their positions for a period of the year that’s typically more bearish for prices, according to Vinicius Ito, director at Marex North America in New York.
The USDA trimmed its US corn outlook due to dry weather, meaning this year’s harvest will no longer be a record. Meanwhile, American farmers are now also seen exporting less this season than previously expected.
--With assistance from Gerson Freitas Jr..
©2023 Bloomberg L.P.
Source: bnnbloomberg.ca