NEW YORK (Dow Jones)--Thunderstorms across parts of west Texas dumped
golf-ball-sized hail on the region's cotton fields Thursday night and sparked a
run-up in futures on fears the weather will seriously damage the much-needed
crop.

The South Plains region--a big source of the state's cotton
production--absorbed the brunt of the storms, according to weather reports,
including more than two inches of rain and hail measuring up to one inch in
diameter.

With the global market leaning heavily on U.S., the world's biggest exporter
of the fiber, to close its output gap, investors worried the storms would
destroy significant amounts of the crop in Texas, the nation's biggest grower.

Futures for December delivery surged by 4 cents, or 3.5%, to $1.1971 a pound
early Friday, hitting the exchange-imposed limit for one-day price swings. The
contract settled there, falling a fraction of a cent short of the
post-Reconstruction Era high set Oct. 15. The fact that futures stayed "limit
up" all day is a sign that pent-up demand is likely to carry over into Monday's
trading.

Demand for U.S. cotton has soared since major producers Pakistan and China
lost parts of their crops to flooding and heavy rains. Since early July,
futures are up 53%.

Cotton needs to be completely dry before it is harvested. The heavy rains in
Texas will not only delay harvesting but could damage the actual crop or stir
up mud that discolors the cotton and harms its value.

"There'll be some instances where possibly there's damage beyond saving,"
said Shawn Wade, a spokesman for the Plains Cotton Growers Association in
Lubbock, Texas. "It might take a couple of days before we get a better
picture."

Analysts said the hailstorms shouldn't seriously affect total production, but
in such a tight market even small losses are concerning.

"You would think the crop is gone the way the market reacted," First Capitol
Group's Sharon Johnson said. "The problem is, we can't quantify what they've
lost yet."

Two years ago, a major hailstorm interrupted cotton harvesting in Texas,
ruining much of the crop and contributing to a drawdown in global inventories,
which remain at multiyear lows today.

The U.S. Department of Agriculture this week said export deals for about half
a million bales, each weighing 480 pounds, were struck last week. Analysts say
nearly two-thirds of this marketing year's expected U.S. exports are already
spoken for.

With no indication that buying by China's textile mills will slow in the near
future, the market is vulnerable to price spikes whenever supplies are
threatened.