Cotton futures had their largest percentage gain in more than a year as forecasts call for near-freezing temperatures for west Texas growing areas.
Cotton for December was up 3.1% at 68.97 cents a pound, on track for its largest percentage gain since July 12, 2016. Weather-forecasting agencies were reporting temperatures in the 30s in Lubbock, Texas, for later this week, stoking fears of an early freeze that could cut into yields for cotton in the largest growing state in the U.S.
At the same time, Michael Kerensky, a trader at R. J. O'Brien & Associates, said that India's decision Monday to increase its minimum support price for its cotton could push some business back to U.S. exports. The price supports were above expectations, he said.
As of last Tuesday, cotton's net-long position was the least bullish in seven weeks, according to the Commodity Futures Trading Commission, which led shorts in the market to cover those bets Monday.
About 30% of cotton had been harvested in Texas as of the week ended Oct. 15, according to the U.S. Department of Agriculture, with 73% of bolls opening. Louis Rose, director of research and analytics at Rose Commodity Group, said that if bolls are mature and ready to open, the freeze shouldn't have much of an impact on yields.
"But if you get a freeze on a green boll, it will never open. It will rot," he said.
Capping gains, Mr. Rose said, Monday's bounce should lure index funds to sell out of long positions early as they roll out of positions in the December contract.
In other markets, raw sugar for March was down 0.9% to close at 13.88 cents a pound, cocoa for December was off 0.7% to settle at $2,124 a ton, December arabica coffee lost 0.7% to end at $1.2435 a pound, and frozen concentrated orange juice for November dropped 2.1% to close at $1.5275 a pound.
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(END) Dow Jones Newswires
October 23, 2017 17:07 ET (21:07 GMT)