By Don Molino, The Voice of Louisiana Agriculture Radio Network
Cotton prices opened limit up Tuesday and never moved with 90-plus-cents a pound in most trading months. New crop December opened and finished at 90.65.
Dr. Jody Campiche, Vice-President of Economics and Policy Analysis for the National Cotton Council in Memphis, said there were two primary factors.
"One is the continued drought in Texas. Over the past several days they have reached record high temperatures so there is definitely some concern about the Texas crop and whether there will be enough moisture to get that crop up this year," said Campiche.
"Another concern was the tropical storm that came ashore over the Memorial Day weekend in the Southeastern United States and the concern about possibly flooding rainfall in the Florida, Alabama and Georgia areas."
There are several other factors in sharply higher cotton prices as well.
"We have really strong demand right now and it looks like US cotton may have strong export sales for the current crop year and the 2018/20-19 crop year. We've seen a record level of open interest so there has been a lot of speculative buying in the market," Campiche pointed out."
Then there are concerns about the crops in both India and China.
"We think there will be fewer cotton areas in production in India this year. There has also been a slight concern over weather conditions in the main cotton production region of China. We also think later this year China could start importing more again as they start working through their reserves, to that could lead to even stronger demand for US exports," according to Campiche.