June 9 (Bloomberg) -- Cotton climbed the most in more than a week after the government said output will drop more than forecast in the U.S., the world's top shipper.
Cotton production will fall to 17 million bales, compared with 18 million estimated a month ago, the U.S. Department of Agriculture said today. Six analysts surveyed by Bloomberg News forecast 17.38 million bales. Crops in Texas, the biggest producing state, are suffering after the driest May since 1956, according to an agricultural program at Texas A&M University in College Station.
"It's a very reasonable downward estimate," said Chris Kramedjian, a risk-management consultant at FCStone Fibers & Textiles in Nashville, Tennessee.
Cotton for December delivery rose 2.84 cents, or 2.2 percent, to $1.3299 a pound on ICE Futures U.S. in New York, the biggest gain since May 31.
Today was the first time the government lowered its June production outlook from May since 1998, which was "also a severe drought year," said Sharon Johnson, a senior analyst at Penson Futures in Atlanta.
"It suggests to me there will be additional cuts over time," Johnson said.