Cotton futures had their largest percentage gain in more than a year as forecasts call for near-freezing temperatures for Texas. Fears of an early freeze could cut into yields of cotton in Texas. Texas is the largest cotton growing state in the US. India’s decision to increase minimum support price for its cotton could push some business back to US exports. Price supports were above expectations.

About 30 per cent of the cotton was harvested in Texas as of the week ended October 15. If bolls are mature and ready to open, the freeze shouldn’t have much of an impact on yields. But if a green boll gets a freeze, it will never open and will rot.

Cotton for December was up 3.1 per cent, on track for its largest percentage gain since July 12, 2016. Monday’s bounce should lure index funds to sell out of long positions early as they roll out of positions in the December contract. Expectations of a record cotton yield this year in the US may be dashed. The main reason is the hurricane damage to crops. Another reason is strong competitor shipments. The downgrade reflected reductions to expectations for both harvested area and yield.