Cotton futures slid after entering bear market on Wednesday as forecasts for crops in the US, the world’s largest biggest exporter; improved and showed signs of abundant world supplies.
Ample rains have eased drought conditions in Texas; the US leading crop grower; in the past two months, according to Drew Lerner, the president of the World Weather. The US Department of agriculture predicts domestic output may climbed by 16% from the previous year to the season that begins August 1.
Cotton futures have fallen by 11% this year. Data from USDA showed that the bigger American crop will add to stockpiles in China, boosting global inventories to its highest.
“We’re going to have a very good crop, and that’s a problem,” Mike Seery, the president of Seery Futures in Plainfield, Illinois, said. “The market doesn’t have any good fundamentals, there’s just going to be a lot of supply,” he added.
Cotton futures for December delivery lost 1.6% to 75.26 cents a pound at the time of writing on the ICE Futures US, marking a 21% drop since this year’s settlement high of 94.75 cents on May 5.
Free Reports:
The US economy contracted 2.9% in the first quarter, compared to analysts forecasted of a 1.8% contraction, according to a report from the Department of Commerce.
According to the USDA, domestic farmers may collect 15 million bales this year, compared to last year’s figure of 12.91 million.
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