December 09, 2010, 3:47 PM EST
By Leslie Patton
Dec. 9 (Bloomberg) -- Cotton rose the most allowed by ICE Futures U.S., touching a three-week high, on signs of robust demand.
In the week ended Dec. 2, U.S. shipments of upland cotton jumped 21 percent from a year earlier to 323,356 bales, the Department of Agriculture said. Last week, the U.S. exported 322,977 bales. Futures in New York have surged 80 percent this year, heading for the biggest annual gain since 1973.
“That’s a big shipment number,” said Keith Brown, the president of Keith Brown & Co., a brokerage in Moultrie, Georgia. “These numbers are healthy.”
Cotton futures for March delivery jumped the exchange maximum of 4 cents, or 3 percent, to settle at $1.3595 a pound at 2:41 p.m. on ICE in New York. That’s the highest since Nov. 16. Prices reached a record $1.5195 on Nov. 10.
“The market is intact to the upside,” said Brown, who estimated prices may rise to $1.38 next week.
The U.S., the world’s biggest exporter, is forecast to ship 15.75 million bales in the year ending July 31, up from 12.04 million last season, the USDA said on Nov. 9. A bale weighs about 480 pounds, or 218 kilograms.
The USDA will update its global crop projections tomorrow at 8:30 a.m. in Washington.
Stockpiles Drop
U.S. inventories held in warehouses monitored by ICE fell 19 percent to 99,957 bales yesterday, the first decline since early October. Stockpiles are down 76 percent this year.
Output in India, the world’s second-biggest exporter, may miss an earlier estimate because of unseasonal rainfall, a textile mills group said. A bale in India weighs 375 pounds, or 170 kilograms.
Production may total 29.5 million to 30 million bales for the year that began Oct. 1, the Confederation of Indian Textiles Industry said. That compares with 32.5 million predicted by the Cotton Advisory Board.
The Indian news is a “bullish story,” Mike Stevens, an independent trader in Mandeville, Louisiana, said in an e-mail.
Orange-juice futures for January delivery dropped 3.55 cents, or 2.1 percent, to settle at $1.6245 a pound in New York. Prices have gained 26 percent this year.
--With assistance from Thomas Kutty Abraham in Mumbai. Editors: Millie Munshi, Steve Stroth
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