Cotton futures rose, heading for a fifth straight monthly gain propelled by tight supplies in top shipper U.S. and signs of fresh harvest delays amid strong Asian demand.
American sales overseas are booming. U.S. weekly export sales as of Oct. 21 are up nearly a third from last year, with bigger Chinese purchases. The only thing holding shipments back is logistical chaos, and the difficulty of moving product right now amid high freight rates between Asia and the U.S.
Cotton has been expensive, eating away at margins for apparel makers, and the export figures show the high prices are likely to continue. That could eventually filter down to consumers, and raise prices for clothing worldwide.
While the U.S. is expected to collect a bigger crop, the harvest is very late. Heavy rains the last 48 hours in southwest Georgia, the second-biggest producer, parts of Alabama and northern Florida will probably prove “disruptive for few days,” though long lasting damage is unlikely, said Drew Lerner, the president of World Weather Inc.
The December contract gained 2.9% to $1.1373 a pound on ICE Futures U.S., bringing October’s gain to 7.5%. The commodity surged 52% this year supported by projections for a second world deficit. Stockpiles at ICE-monitored depots are poised to drop to the lowest level in a year.
