March 25 (Bloomberg) -- Cotton futures fell, capping the longest slump in six months, on mounting speculation that global supplies will outpace demand.
Cotlook Ltd., a research company, boosted its forecast today for a global surplus in the 12 months starting Aug. 1 by 51 percent. U.S. planting this year may total 11 million acres, 10 percent more than a Feb. 22 government forecast, Jordan Lea, the chairman of Eastern Trading Co., an exporter in Greenville, South Carolina, said last week.
U.S. “acres will likely be above 10 million, possibly 10.5 million,” John Flanagan, the president of Flanagan Trading in in Fuquay-Varina, North Carolina, said today in a report. “This could produce a crop of 14 million to 16 million bales and would be viewed as bearish by traders.”
Cotton for May delivery dropped 0.8 percent to settle at 86.59 cents a pound at 2:30 p.m. on ICE Futures U.S. in New York. The price fell for the fourth straight session, the longest slump since Sept. 26.
In the four months ending in February, cotton jumped 22 percent, spurring U.S. farmers to consider a shift back to fiber planting. The commodity touched a 31-month low in June, while corn and soybeans surged to records last year.
Global production will exceed demand by 1.725 million metric tons, up from 1.145 million forecast in February, Birkenhead, England-based Cotlook said. A bale weighs 480 pounds, or 218 kilograms.