Cotton experienced a volatile month, with prices under pressure due to plentiful supplies and a weak demand outlook; and fell to a 3-year low at one point in the month. Cotton joined other commodities on June 29th, and rallied as European leaders came to an accord on combating the euro zone debt crisis. FBenchmark December cotton on ICE Futures U.S. climbed 2.62 percent, or 1.82 cents, to end at 71.33 cents per lb. on the 29th. Cotton was 69.6 cents per lb. on June 1st. Cotton also fell to a 3-year low this month, but was lifted off that low by technical buying.
The USDA reported its acreage estimates for U.S. crops on the 29th, and unlike the other soft commodities, cotton acreages were right in line with expectations. Weather woes are not likely to impact cotton as much as corn, and wheat, due to oversupply. Also, if cotton crops are lost due to the weather, they won’t likely be replanted with more cotton.
As of June 1, the U.S. Agriculture Department’s annual acreage report estimated that cotton producers planted or intended to plant 12.635 million acres, well below the 14.735 million devoted to cotton in 2011. USDA made major cuts to acres in some big cotton growing states.