Cotton Jumps to Record for Third Day on Rising U.S. Exports

Cotton futures jumped to a record for a third straight day in New York as exports expanded from the U.S., the world’s largest shipper.

Cotton for May delivery advanced 7 cents, the most allowed by the exchange to a record $2.0893 a pound on ICE Futures U.S. in New York at 2:41 p.m. Singapore time. Prices have gained 44 percent this year, the most of any of the 19 commodities in the Thomson Reuters/Jefferies CRB Index.

Exporters in the U.S. sold 181,200 bales of the upland cotton from the previous harvest in the week to Feb. 10, up 63 percent from a week earlier, and 22 percent from the prior four week average, the U.S. Department of Agriculture said yesterday.

“Obviously, the information contained a positive slant and that was continued resilience in U.S. cotton,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. “That’s showing demand still exists at very, very high prices.”

Since June 1, stockpiles monitored by ICE Futures U.S. have plunged 84 percent through Feb. 16. Flooding in Australia and Pakistan and drought in Russia and other parts of Europe have reduced output.

For the year that began Aug. 1, China will consume 47 million bales, exceeding domestic output estimated at 30 million bales, the U.S. Department of Agriculture said on Feb. 9. The deficit may help drain global stockpiles to 42.8 million bales, the smallest since 1996, according to the USDA.

Textile mills are buying more fiber as the global economy recovered from the worst recession since World War II. Costs may rise for U.S. retailers including Gap Inc., J.C. Penney Co. because cotton has more than doubled in the past 12 months. Olah Inc., a U.S. apparel manufacturer that supplies Gap, said it raised prices for “several products.”

Trading in cotton options was halted by the exchange, which determined that the synthetic price change for contracts was at least two times the daily limit, ICE said yesterday in a statement.

(Source: http://www.bloomberg.com/news/2011-02-18/cotton-futures-surge-by-daily-limit-to-all-time-high-on-increased-demand.html)