The world's biggest importer of cotton helped cotton prices climb following speculation that U.S. supplies will be unable to coincide with demand, Bloomberg reports.
U.S. inventories stooped to their lowest amounts in 14 years yet the prices increased the most allowed by ICE Futures. According to the Agriculture Department, stockpiles of cotton for the year ending July 31 will amount to 1.9 million bales, the lowest since Bloomberg began noting data in 1996.
"There is lot of bullishness in the market," Sid Love, the president of Joe Kropf & Sid Love Consulting Services LLC in Overland Park, Kansas, told Bloomberg. "Also, news from China has perked up the entire commodities pack."
China, the world's biggest user of cotton, did not raise interest rates over the weekend as investors, analysts and observers anticipated. Commodity demand rose as indicated by the Thomson Reuters/Jeffries CRB Index, which revealed coffee, sugar and silver were among the 19 commodities to climb.
U.S. cotton yields will be 0.8 percent lower than what was estimated in November coming in at 814 pounds per acre rather than 821 as a result of hail impairing Texas' crops.
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