Oct 12 (Reuters) - ICE cotton futures on Thursday fell over 1 percent to post their biggest percentage fall in three weeks after federal data estimated that U.S. 2017/18 production was not reduced by recent hurricanes as much as the market had expected.
The December cotton contact on ICE Futures settled down 0.89 cent at 67.84 cents per lb after falling to over one-week low of 67.66 cents per lb. Prices fell 1.29 percent to register their biggest one-day percentage decline since Sept. 21.
The U.S. Department of Agriculture (USDA), in its monthly World Agricultural Supply and Demand Estimates (WASDE) report, lowered U.S. production estimates for the 2017/18 crop year by 643,000 bales to 21.12 million bales.
"The reduction was not as much as people expected, the reduction was bearish... some people felt it could go down to about 21 million, but it did not," said Peter Egli, director of risk management at British merchant Plexus Cotton.
The cuts in U.S. production were reported largely in Texas and Georgia, the two top cotton-producing states impacted by hurricanes Harvey and Irma, the report said.
"We didn't lose any cotton on the global basis as the other origins made up for it," Egli said.
The agency, however, marginally raised its global production estimates by about 100,000 bales as larger expected crops in Argentina, Brazil, and Greece more than offset the reduction in the forecast for the United States.
"Despite widespread expectations for a bearish surprise, the October WASDE essentially confirmed the numbers the trade was already working with. With a carryout of 5.8 million bales in the U.S., it will be difficult to justify futures much over 70 cents," said Barry Bean, a cotton buyer based in Gideon, Missouri.
Total futures market volume rose by 12,777 to 27,278 lots. Data showed total open interest gained 604 to 230,059 contracts in the previous session.
The dollar index was up 0.08 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.12 percent. (Reporting by Swati Verma and Nithin Prasad in Bengaluru; Editing by Lisa Shumaker)