NEW YORK: ICE cotton futures fell to a one-week trough on Wednesday as traders were concerned over increased supply amid improving crop conditions in key-growing regions.
Cotton contracts for December fell 0.08 cent, or 0.1%, to 92.45 cents per lb, by 1:26 p.m. EDT, having hit its lowest since August 24 earlier in the session.
“The crop conditions are good, and though the crop in West Texas is still a bit late, the potential is there to make a fairly big crop,” Peter Egli, director of risk management at British merchant Plexus Cotton, said, adding US supply seemed to be larger than the US Department of Agriculture’s (USDA) projection in August.
The USDA said it would review acreage estimates for cotton in the September report, after it lowered its production estimate by over half a million bales for the 2021/22 crop year in last month’s supply and demand report.
Adding to concerns over increased cotton supply, the USDA’s weekly crop progress report on Monday showed 70% of the cotton crop was in a good-to-excellent condition in the week ending August 29. That compares with only 44% for the same period a year ago.
Analysts also said Hurricane Ida, which swept through Louisiana, Mississippi and New Orleans, did not cause major damage to the cotton crop. Market participants now eye the USDA’s weekly export sales report due on Thursday.