Cotton futures started firm, and ended firmer.
The New York May contract ended up 1.8% at 80.39 cents a pound, returning back above the psychologically important 80 cents-a-pound mark - and taking above 4% its gains in two sessions.
This despite the US Department of Agriculture on Thursday starting a two-day, and much-watched, forum giving detailed forecasts for 2018 which has been long expected to show a bumper US cotton crop in train, with sowings boosted by elevated prices.
That said, drought in Texas, responsible for half of the US cotton crop, has raised doubts over how much of these plantings will actually materialise, let alone make it to a decent harvest yield.
Abandonment factor
“Given how the USDA has projected yield and abandonment during a recent drought across west Texas, we think it is plausible that the USDA will project 2018 US production at significantly less than 20m bales,” said Louis Rose at Rose Commodity Group.
That would be well below the 21.3m bales produced in the latest harvest.
The National Cotton Council two weeks ago forecast output at 19.4m bales, based on a farmer survey result of sowings up 3.7% at 13.1m acres, an abandonment rate of 15%, and an average yield of 842 pounds per acre.
There are ideas that weekly US export data, on Friday, will come in strong too boosted by the drip in prices ahead of this week’s recovery.
Source: Agrimoney