Bloomberg News

Cotton Falls as Commodity Demand May Wane; Orange Juice Gains

November 17, 2011

Nov. 17 (Bloomberg) -- Cotton fell the most in more than eight weeks on concern that Europe’s debt crisis will slow global growth and trim commodity demand. Orange juice rose.

The Standard & Poor’s GSCI Index of 24 raw materials fell as much as 3.2 percent as European borrowing costs surged amid mounting concern the region’s leaders will fail to stem fiscal woes. World cotton demand will be 1.7 percent lower than forecast last month, leaving a “massive” surplus of more than 3.5 million metric tons, according to Cotlook Ltd., a research company in Birkenhead, England.

“The world’s going to have enough cotton to meet its demands,” John Flanagan, the president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina, said in a telephone interview. “Demand is slow because of the economic situation in the U.S. and Europe.”

Cotton for March delivery declined by the exchange’s 4-cent limit, or 4 percent, to settle at 96.48 cents a pound at 2:46 p.m. on ICE Futures U.S. in New York, marking the biggest loss since Sept. 19.

The fiber has tumbled 56 percent from a record $2.197 on March 7. A bale weighs 480 pounds (218 kilograms)

“The commercial sector is still ailing, as evidenced by the complete lack of demand outside of China,” Andy Ryan, a senior-risk management consultant at INTL FCStone Inc. in Nashville, Tennessee, said in a report.

Orange-juice futures for January delivery advanced 1.8 percent to $1.7185 a pound in New York, the biggest gain since Oct. 24. The commodity has advanced 13 percent in the past year.

Inventories of frozen orange juice monitored by ICE have dropped 59 percent to 24.4 million pounds from a year earlier, exchange data show.

“Supplies have been a little tight,” Jack Scoville, a vice president at Price Futures Group in Chicago, said in a telephone interview.

--Editors: Millie Munshi, Patrick McKiernan

To contact the reporter on this story: Blair Euteneuer in Chicago at

To contact the editor responsible for this story: Steve Stroth at

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