Cotton jumped by the exchange limit on renewed concern that dry weather in U.S., the world’s biggest exporter, may crimp output and as a weaker dollar boosted demand for commodities.Orange juice also gained.
The heat and dryness in the southern U.S. may “hurt” cotton plants, said David Streit, a senior lead forecaster for Commodity Weather Group LLC. Futures in New York slumped as much as 33 percent from a record $2.197 a pound on March 7 as the doubling of cotton prices slowed purchases by China, the largest user.
“Today, it seemed that cotton has bottomed out, as next year’s U.S. output may be at a risk because of weather problems,” said Mike Stevens, an independent trader in Mandeville,Louisiana. “Also, the weaker dollar is providing a good support to commodities.”
Cotton for July delivery on ICE Futures U.S. jumped by the exchange limit of 6 cents, or 4 percent, to settle at $1.5802 a pound at 2:44 p.m. in New York. For the month, prices slumped 21 percent, the biggest slide since June 1995.
The U.S. Dollar Index was poised for its biggest monthly decrease since September. A weaker dollar makes raw materials priced in the U.S. currency more attractive to overseas buyers. The index was headed for a fifth straight weekly drop.
Orange-juice futures for July delivery gained 2.5 cents, or 1.5 percent, to $1.687 a pound on ICE. The price climbed 3.6 percent this month.
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