Ilena Peng, Bloomberg News
(Bloomberg) -- Cotton fluctuated as traders monitored the path of Hurricane Beryl, which made landfall in Texas early Monday.
The storm is expected to pass over eastern Texas on Monday — missing the state’s key cotton-growing regions in the northwest — before heading through the Lower Mississippi Valley and Ohio Valley on Tuesday and Wednesday. The biggest risk is potential flooding damage in southeast Texas, but lighter showers in the western part of the state and Arkansas will be beneficial to crops, said Cade Groman of Commodity Weather Group.
Cotton futures rose as much as 1.4% in New York on Monday, before erasing the gains to trade little changed.
Rain is “probably not the best” for open cotton bolls and could impact quality, but the resulting moisture for other growing areas in the mid-South region “will be a net benefit,” said Louis Barbera, a managing partner at VLM Commodities.
However, storage warehouses in Arkansas, Mississippi and Missouri remain at risk as the storm continues to travel. Any damage could “ruin supplies and compress an already tight cash market,” said Walter Kunisch, a senior commodities market strategist at Hilltop Securities Inc.
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Source: bnnbloomberg.ca