Cotton futures gained Monday as traders and analysts were assessing how much damage tropical storm Harvey could do to the U.S. cotton crop.
Cotton futures for October delivery added 2.5% to settle at 69.83 cents a pound on the ICE Futures U.S. exchange.
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Flooding and heavy rainfall from Tropical Storm Harvey are hitting Texas and Louisiana, two of the country's largest cotton growing states. Cotton fibers are stripped from the plant by the rain, and storage modules that hold harvested cotton are also vulnerable in the flooding areas, analysts said.
Two weeks before Harvey hit, the U.S. Department of Agriculture predicted a bumper cotton crop, estimating that the nation would produce 20.5 million bales--the largest production in 11 years.
Andy Ryan, a risk-management consultant for cotton at INTL FCStone, said the amount of actual bales that could be lost in the storm could be limited, as a lot of cotton has already been harvested in the two southern states.
"The U.S. probably lost about 200,000 to 300,000 bales of cotton production, but a lot more bales are being affected by the rain," he said.
The real damage could be on the cotton that is sitting in storage modules, each of which contains 13 to 15 bales of harvested cotton that is yet to be ginned. The quality of the cotton sitting in the modules will be downgraded to "salvaged" if the area is affected by flooding or rain, Mr. Ryan said.
In other markets, raw sugar for October was up 2% to settle at 14.31 cents a pound, arabica coffee for December edged down 0.04% to close at $1.3135 a pound, frozen concentrated orange juice for September was down 2% to settle at $1.3275 a pound, and December cocoa gained 3.3% to settle at $1,997 per ton.
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(END) Dow Jones Newswires
August 28, 2017 15:28 ET (19:28 GMT)