Cotton for March delivery dropped as much as 3.1 percent to $1.1937 a pound, the lowest price since Oct. 22, on ICE Futures U.S. in New York at 4:34 p.m. Tokyo time. The fiber fell 8.2 percent last week, the most since February 2009.
“Like soybeans in Chicago, cotton is very sensitive to any impact on China’s demand,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul. The dollar’s weakness may limit a further drop in futures today, he said.
Cotton for May delivery slumped as low as 25,840 yuan ($3,891) a metric ton, near the daily limit, on the Zhengzhou Commodity Exchange and settled at 26,460 yuan. The July and September contracts tumbled by the 5 percent daily limit to 25,850 yuan and 25,770 yuan, respectively.
On Nov. 19, cotton in New York fell by the exchange limit of 6 cents after China ordered its banks to set aside larger reserves for the fifth time this year, draining cash from the financial system to limit inflation.
The price has gained 61 percent this year, reaching a record $1.5195 on Nov. 10, amid surging demand from China and plunging inventories in the U.S., the leading exporter.
The euro gained for a fourth day as European finance ministers said a deal will create a capital fund for Ireland’s banks and may end up “restructuring” the financial industry. The currency rose as high as $1.3752 from $1.3673 in New York on Nov. 19. A weakening dollar makes U.S. supplies cheaper for importers holding other currencies.
China Crop
China’s new-crop cotton harvest was 68.4 percent completed by the end of October, less than the 81.9 percent completed at the same time last year, the China Cotton Association said today, citing a National Development and Reform Commission report.
Monsoons in India, the world’s second-biggest grower, prompted farmers to plant more fiber, according to the Cotton Association of India. Output in the year that started Oct. 1 may reach 35.7 million bales, up 3.6 percent from the September forecast, the association said on Nov. 16. A bale in India weighs 375 pounds, or 170 kilograms.
Stockpiles monitored by ICE rose 10 percent to 50,454 bales as of Nov. 18. They have jumped fivefold from this year’s low of 8,910 bales on Oct. 8. The 2010 high was 1.08 million bales on June 2. A bale weighs 480 pounds, or 218 kilograms.
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