Growers in the U.S. cut cotton acreage 13 percent this year, according to the government, switching land to soybeans, corn and wheat as prices climbed to records. Investors often buy and sell cotton together with these crops because they compete with each other for acres in the U.S., the largest exporter of the fiber. The U.S. Dollar Index fell the most in 10 years.
" weak dollar and stronger grains and crude oil were the factors today," said Hibbie Barrier, a director at Avondale Futures in Nashville, Tennessee. Oil rose as much as 10 percent.
Cotton futures for December delivery climbed 0.21 cent, or 0.5 percent, to 46.88 cents a pound on ICE Futures U.S. in New York.
he fiber's gain was smaller than other commodities because demand is weak, Barrier said. The Reuters/Jefferies CRB Index of 19 raw materials jumped the most in more than 50 years today.
Corn rose 7.7 percent, soybean futures climbed 6.6 percent and wheat gained 9.2 percent.
"Cotton continues to lag other commodities because of the weak global demand outlook and impending harvest pressure," Barrier said. "ou have cotton coming in from all over the world."
Cotton has fallen 31 percent this year amid concern that the slowing global economy may curb textile buying and as investors sold commodities to raise cash amid a global credit crunch.
Slowing Exports
Exporters will ship 13 million bales of the fiber from the U.S. this marketing year, the Department of Agriculture said on Oct. 10, less than the 14.5 million forecast last month and trailing the 13.65 million bales shipped a year earlier, because of a slowing world economy. A bale of cotton weighs 480 pounds (218 kilograms).
"he pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures," the Federal Open Market Committee said today in a statement following a meeting in Washington. "usiness equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports."
The Federal Reserve cut its benchmark bank-lending rate to 1 percent from 1.5 percent to boost economic growth.
