Cotton Posts Worst Fall in 15 Years --- Report That Texas Storms Did Little Damage Halts Record Run for Prices
Cotton prices posted the biggest drop in 15 years after Texas crop watchers reported that this year's harvest emerged relatively unscathed from a recent hailstorm.</br></br>The price of the cotton futures contract for December delivery fell six cents, or 4.6%, to $1.2359 a pound on ICE Futures U.S. It was the biggest decline in outright terms since 1995 and the biggest in percentage terms since August 2009.</br></br>The fiber, a big part of clothing prices, had set record closes in five consecutive sessions through Tuesday. While cotton prices in nominal terms had been at a post-Reconstruction Era peak, they remain well below the inflation-adjusted high of $5.26 a pound set in 1918.</br></br>"The market is hypersensitive right now to any news that might impact supply," said Luis Rangel, vice president of commodities derivatives at ICAP Futures. "When the bull stories don't pan out, you're going to see some violent moves on the downside."</br></br>Thunderstorms moved through West Texas last week, dumping hail and heavy rain on the region's cotton fields. Prices jumped on worries the storm would damage crops and significantly cut into output. But early analyst estimates compiled by industry newsletter Cotlook put the losses at 50,000 to 150,000 bales. By comparison, the U.S. Department of Agriculture expects Texas to produce 8.9 million total bales of cotton. The U.S. is the world's biggest exporter of cotton, and Texas accounts for a bulk of output.