"Some trade was doing some bearish options this morning that was putting some pressure on the price," said Peter Egli, director of risk management at British merchant Plexus Cotton. "Right now everyone is on wait-and-see mode ahead of the storm (Irma) hitting the Southeast over the weekend ... There is still a chance this storm could do some harm to a lot of crops," Egli added.
Hurricane Irma is expected to hit the United States along the eastern coast of Florida, according to the National Weather Service, before moving on to Georgia, South Carolina and North Carolina, which are states known for cotton, grain and livestock production. "(Cotton) producers along the eastern seaboard are looking at the potential for three consecutive years of significant damage at the hands of an active tropical season," Louis Rose, co-founder and director of research and analytics at Rose Commodity Group said in a note.
Total futures market volume fell by 19,530 to 26,236 lots. Data showed total open interest gained 3,184 to 237,984 contracts in the previous session. Certificated cotton stocks deliverable as of Sept. 6 totalled 8,730 480-lb bales, unchanged from the previous session. The weekly export sales report from the US Department of Agriculture will be released on Friday, delayed due the Labour Day holiday on Monday.
Copyright Reuters, 2017