Cotton prices jumped, approaching a record, on concern that global supplies will trail demand further after cold weather in China and storms in the U.S. hurt crops.

Before last week’s cold snap, China’s cotton output was already forecast to be 18.5 million bales short of domestic consumption this season, leading to higher imports, U.S. Department of Agriculture data show. Purchases may further erode worldwide inventories that the USDA projected will drop to a 14- year low. Cotton futures have surged 71 percent this year.

China’s crop has “struggled all year,” said O.A. Cleveland, an analyst at cottonexperts.com in Starkville, Mississippi, and professor emeritus in agricultural economics at Mississippi State University. Output in Xinjiang province “easily could be 3 million bales less than the USDA estimate,” he said.

Cotton for December delivery rose by the limit of 4 cents, or 3.2 percent, to settle at $1.2926 a pound at 3:06 p.m. on ICE Futures U.S. in New York. On Oct. 26, the price reached $1.305, the highest level since the fiber started trading 140 years ago.

Futures for March, May and July delivery also advanced by the exchange limit.

The trading limit will rise to 5 cents tomorrow, ICE said.

In October, cotton surged 23 percent, the most since June 2007. This year’s gain tops the 18 other raw materials in the Thomson Reuters/Jefferies CRB Index.

China’s Outlook

China’s harvest will drop to 6.4 million tons in the year that began Aug. 1, down 7.9 percent from a year earlier, said Cotlook Ltd., a research firm based in Birkenhead, England. That forecast was made before the China Meteorological Center said on Oct. 25 that the cold front may hamper harvesting and reduce fiber quality.

Crops in the U.S., the largest exporter, were damaged by a hailstorm in Texas, the biggest state producer.

The harvest in Texas was 45 percent completed as of yesterday, up from 37 percent a week earlier, the USDA said after the close of regular trading. The national tally was 61 percent, up from 53 percent.