Harvey Fails to Dent US Cotton Prospects

The prospect for the cotton crop in the US has been lifted above 20 million bales, an 11-year high. This is despite damage from Hurricane Harvey. The upgrade was only 50,000 bales short of July estimates before Hurricane Harvey struck. This is the first major hurricane to make landfall in the US in 12 years.

There have been continued attempts by cotton investors to assess damage to the US crop from the storm, which affected Texas in particular, which is typically responsible for about half of the domestic output of the fiber. Some estimates for damage have exceeded 6,00,000 bales, including losses of so-called modules, the temporary storage piles of compressed crop at the edge of fields. However this would represent a relatively small part in production terms of the cotton harvest.

Hurricane Harvey and its aftermath represent a more concentrated version of the uncertain weather market that cotton has faced all summer. This uncertainty will continue now around the question of whether the 2017 crop can get enough heat units and clear weather to mature. The forecast for the crop in India, the world's top grower, has been raised to 6.46 million tons and that for production in China to 5.16 million tons.