By Julie Wernau
Cotton futures reversed course to end lower Thursday after a monthly update from the U.S. Department of Agriculture surprised analysts with larger-than-anticipated production estimates.
Cotton for March delivery lost 1.1% to end at 72.34 cents a pound on the ICE Futures U.S. exchange, erasing gains from earlier in the session.
Analysts surveyed by the Wall Street Journal had expected between 16.4 million and 16.52 million bales of U.S. cotton production, largely in line with the government's projections from December.
Instead, the government raised production by 435,000 bales from last month to nearly 17 million bales, citing higher production in Texas, raising exports to 12.5 million bales, which still raised ending stocks of the fiber to 5 million bales, from 4.8 million bales last month.
The U.S. is the world's largest exporter of cotton.
Larger production was also the main factor driving a 1.5-million-bale increase in projected global ending stocks of cotton. In addition to the increase for the U.S., production was raised 1.0 million bales for China. The agency said inspection data indicates higher production than previously expected for the Xinjiang region at a time when consumption is lower than anticipated in major importing regions including India, Mexico and Turkey.
In other markets, raw sugar for March ended up 1% at 20.76 cents a pound. Cocoa for March was up 4.8% to end at $2,230 a ton, arabica coffee futures for March delivery were up 0.4% to settle at $1.496 a pound, and frozen concentrated orange juice for March rose 0.3% to end at $1.845 a pound.
Write to Julie Wernau at email@example.com
(END) Dow Jones Newswires
January 12, 2017 18:16 ET (23:16 GMT)
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