Cotton futures fell the most in seven weeks after the U.S. government increased its projections for the world crop.
World output for the crop year starting Aug. 1 is seen at 118.02 million bales, up 0.7 percent from 117.16 million estimated in June, the U.S. Department of Agriculture said today in a report. Consumption will be 109.79 million bales, less than the 110.17 million forecast a month ago. Stockpiles may be 94.34 million, up 10 percent from a revised 85.58 million in the previous year. A bale weighs 480 pounds, or 218 kilograms.
“There is no upside for cotton without a weather event, especially with the increase in world output,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “There will have to be a lot more drought-like weather in Texas to see anything bullish again.”
Cotton for December delivery fell 2.2 percent to 84.88 cents a pound on ICE Futures U.S. in New York at 1:47 p.m., heading for the biggest loss since May 21.