Heavy rains in April and May in the US have delayed cotton planting in several states, including top producer Texas. Cotton for December delivery rose 5.6 per cent for the latest week to 67.51 cents a pound, the highest close since April 30.
The surge reflects hopes that the gap between US cotton production and demand will narrow. The feeling is that the US would produce less cotton in the year ahead than in the current year, but demand will remain near the lowest in more than a decade as apparel and textile companies turn to synthetic fibers. The US is the world’s largest cotton exporter.
South Texas is a traditional source of early, new crop bales, with a reputation for high fiber quality. If crop yields in Texas are lower, or if the harvest is delayed and the maturing crop gets too wet from seasonal rains, it could create a temporary shortage of quality fiber. The harvest is likely to run behind schedule due to the late start of the planting. The spring rains, which ended a four-year drought in Texas, also made it difficult for growers to get the seed into the fields. As of June 21, 94 per cent of the planned US cotton acreage had been sown, while in previous years planting was complete at this point.