A Southeast Australia region whose production of cotton is high will suffer reduced harvesting of the soft fiber because of flooding, according to Bloomberg.
More than 18,500 acres of crops in Theodore have been ruined as a result of heavy rainfall, according to David Bone, lead spokesman of Cotton Australia of Sydney. Australia is the globe's fourth-biggest exporter of the soft commodity. Theodore is part of the state of Queensland.
"Around Theodore, crop has been washed away," Bone told Bloomberg. "There would be losses in other areas but you need the water to go off the land and for the crop to attempt to recover before you can really say what the situation is."
Cotton for March 2011 delivery slipped 0.0036 cents to settle at $1.44 per bushel just before 1 p.m. Eastern Standard Time in New York.
Chinese demand for the soft commodity pushed up cotton's price to record value last week amidst conjecture that demand would trump supply.
The Meteorology Bureau reports Australia's spring, from September to November, was its wettest thus far.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
