Cotton prices ended higher Tuesday as reports came in from the Carolinas that heavy rains have damaged cotton crops.

While Hurricane Joaquin avoided landfall on the east coast, rains associated with the storm hit Virginia, North Carolina and South Carolina, which represent about 10% of U.S. cotton production.

Rains exceeded 20 inches in parts of South Carolina during a key time for cotton development.

Cotton for December delivery rose 0.3% to 62.08 cents a pound, the highest since Sept. 17 for the most actively traded contract on the ICE Futures U.S. exchange. The contract has jumped 3.2% over the last two sessions.

George Weimer, chief executive at Trendline Investor Services in Cartersville, Ga. estimated that about 25% of South Carolina's crop may have sustained damage. The USDA recently estimated that South Carolina would produce 420,000 bales in its September forecast. Each bale weighs 480 pounds.

"South Carolina had probably the most damage. Their crop was below average to begin with and when you have 20 inches of rain in several days and the flooding that comes with it, that's tough in front of harvest. They have lost a lot of yield," said Michael Quinn, president of Carolina Cotton Growers Cooperative in Garner, N.C., which represents cotton growers in North Carolina, South Carolina, Virginia and Georgia.

Cotton grows inside a protective case called a boll and rain can damage crops once bolls are open or encourage bolls to seize shut and never open. In South Carolina, 88% of bolls were open as of Sunday. Mr. Quinn said seed inside cotton sprouted--which can cause discoloration-- and that some bolls weren't open and farmers reported other potential damage from the rain.

WeatherBELL Analytics in New York said Tuesday that rains are abating in the Southeast but are expected to pick up in the western part of Texas, the nation's largest cotton grower, over the next 10 days.

The U.S. Department of Agriculture is set to release its updated estimates of world agricultural supply and demand on Friday. So far, the agency is expecting U.S. cotton production to be 18% lower for the upcoming harvest because of low prices that encourage farmers to switch to other crops. Commerzbank said in a note that it expected world demand to outstrip production for the first time in six years, lending support to prices.