Cotton futures bounced after the official US crop rating fell to its lowest of the season, and the worst in 11 years, thanks to dryness in key growing states which shows no signs of relief.
New York cotton futures for December, the best-traded lot, settled up 3.8% at 94.48 cents a pound, taking above 14% their rebound from a nine-month low set on July 15.
Tuesday’s gain followed the release overnight by the US Department of Agriculture of a weekly briefing showing that the proportion of the domestic cotton crop rated “good” or “excellent” fell by 4 points week on week to 34%.
That compared with a 61% reading a year before and indeed was the second-lowest figure for the date on statistics going back to 1995.
Only 2011, with a 29% good or excellent figure, showed a lower reading.
The crop decline was particularly marked in the southern Plains state of Oklahoma, where the proportion of cotton rated good or excellent plunged by 11 points to just 15% amid deepening drought.
USDA scouts noted that “100% of the state was in the moderate drought to exceptional drought category, up 37 points from the previous week”, with 82% of Oklahoma topsoil rated “short” or “very short” of moisture.
The fall in the Oklahoma reading took it below even that of neighbouring Texas, the biggest US cotton-growing state, where 17% of in-field cotton was assessed as good or excellent, down 4 points week on week.
In Texas, “irrigated cotton across the state is in good condition while non-irrigated cotton around the state struggled,” USDA scouts said, noting “extreme drought throughout most of the state”.
‘Very limited rainfall’
While a dry spell further north in key corn- and soybean-growing areas looks set to break, with World Weather forecasting that the “lower US Midwest and central Plains will see waves of rainfall continuing over the next several days”, southern Plains states such as Texas look set to stay dry.
“Texas rainfall will continue very limited for the next 10 days keeping stress on most summer grain, oilseed and cotton crops in the state,” said World Weather.
“Current weather forecasts call for hot and dry conditions for much of the Great Plains including west Texas Cotton area,” said Jack Scoville at Price Futures.