Nov. 30 (Bloomberg) -- Cotton fell for the first time in three days on speculation that efforts by central banks to revive growth may fail to overcome increased global supplies of the fiber. Orange juice also declined.
Global cotton production will rise 7.5 percent in the year ending July 31, and demand will drop to a three-year low, the U.S. Department of Agriculture forecast Nov. 9. Prospects of ample supply dimmed initial optimism today over a plan by the Federal Reserve and five central banks to ease monetary policy.
Policy makers “are trying, but it’s going to take much more drastic action” to jump-start economies, Sid Love, the president of Joe Kropf & Sid Love Consulting Services in Overland Park, Kansas, said in a telephone interview. “The ideas that Europe is going to get its act together is questionable, and this move may be more like a Band-Aid.”
Cotton for March delivery dropped 2 percent to settle at 90.91 cents a pound at 2:35 p.m. on ICE Futures U.S. in New York, after gaining as much as 1 percent. Prices are down 59 percent from a record $2.197 on March 7.
Traders are watching for signs that demand is weakening in China, where the need to rebuild government reserves may have driven a jump in imports from the U.S. during the past month, said Tom Reardon, the president of Delta Brokerage in New York. The U.S. government will report weekly export figures tomorrow.
“Even with the robust export numbers lately, cotton has declined, so a weak number would have an impact,” Reardon said in an interview. “People have gotten a little tired of waiting for a rally.”
Orange-juice futures for January delivery fell 0.2 percent to settle at $1.761 a pound in New York. The price has climbed 18 percent in the past 12 months.
--Editors: Steve Stroth, Millie Munshi
-0- Nov/30/2011 19:28 GMT
-0- Nov/30/2011 19:29 GMT
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