Record drought conditions in Texas have spurred speculation that cotton futures could jump to $1.20 by the end of December, according to a Bloomberg survey.

Following the crop's all-time trading high of $2.197 in March, cotton has plunged 53 percent, highlighting a 28 percent drop on the year.

In Texas, the nation's largest grower, farm losses are estimated to have hit a record $5.2 billion due to drought.