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Cotton futures advance on U.S., India crop concerns

Published 07/06/2011, 06:25 AM
Investing.com – Cotton futures were up for the first time in three days on Wednesday, as adverse weather in the U.S. and India added to concerns over deteriorating crop conditions in two of the world’s largest cotton growers.  
   
On the ICE Futures U.S. Exchange, cotton futures for October delivery traded at USD1.1942 a pound during European morning trade, climbing 0.6%.

It earlier rose to a daily high of USD1.2072 a pound.

The U.S. Department of Agriculture published its weekly crop progress report on Tuesday, a day later than usual due to the Independence Day holiday.

According to the data, approximately 41% of U.S. cotton crops were in ‘poor’ to ‘very poor’ conditions as of July 3, unchanged from the previous week. Only 9% of the cotton crop was rated ‘poor’ to ‘very poor’ in the same week a year earlier.

Nearly 28% of U.S. cotton crops were rated ‘good’ to ‘excellent’, significantly below the five-year average of 65% for this time of year.

In Texas, the largest cotton-growing state in the U.S., zero percent of the crop was rated in ‘excellent’ condition, while 34% was rated ‘very poor’, as extremely dry weather conditions over the past week damaged crops.

The U.S. is the world’s third largest cotton producer and the biggest exporter of the fiber.

Meanwhile, India’s agriculture department said Tuesday that monsoon rains over Gujarat were unlikely to pick up until the middle of July, raising concerns over crop yields in India's largest cotton-producing state. 

Rainfall in the region was 80% below normal between June 1 and July 3.

July is normally a critical month for cotton crops in India, as it gets more than a third of the seasonal rain.

The nation is the world’s second biggest grower of the fiber, following China.

Elsewhere, wheat for September delivery tumbled 1.6% to trade at USD6.2513 a bushel, corn for September delivery dropped 0.85% to trade at USD6.2350 a bushel, while soybeans for August delivery slumped 0.5% to trade at USD13.1413 a bushel during European morning trade.

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