Cotton futures staged a slight recovery after crashing down from record highs earlier in the week. Shortly after breaking through to a record $1.305 per pound on Tuesday, the fiber dropped off precipitously. The initial rally had been partially driven by an expectation that thunder- and hailstorms across West Texas would badly damage the crop there, but when those losses failed to materialize, the market looked overbought.
On Friday, the focus was once again on meteorology – this time in China, where a cold snap earlier in the week might hurt supplies of cotton from that nation.
"The China story continues to be bullish for cotton," Sharon Johnson, a senior analyst at First Capital Group LLC in Atlanta, told Bloomberg News. "Demand has not weakened even at these high prices."
Cotton has been on a tear this year, rising over 60 percent as demand consistently exceeded supply. There have been some major production shocks – notably in Pakistan, where devastating floods killed thousands, displaced millions and destroyed about $10 billion worth of crops and farmland.
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