Cotton soared by the daily limit for a second day

Cotton futures in New York soared by the daily limit for a second day, advancing to a maximum of one month after a government report estimates that U.S. inventories be reduced to a minimum of 14 years.

Cotton for March delivery gained 5 cents, or 3.6 percent, to $ 1.4597 a pound, the highest price since 10 November, on ICE Futures U.S. in New York before trading at $ 1.4594 at 1:57 pm Tokyo time. The daily trading limit cotton futures rose to 5 cents per pound today from 4 cents, according to the exchange.

U.S. stocks for the year ending July 31 at a total 1.9 million bales, the lowest level since May 1996 प्रोजेक्टेड
, the Agriculture Department said on 10 December. That is 14 percent below the November estimate. U.S. is the largest supplier in the world.

"Cotton prices have been supported by the U.S. forecast for falling stocks and rising demand from China," said Han Sung Min, a broker Korea Futures Co. in Seoul Bank, today by phone.

Cotton prices have risen 93 percent this year, heading for the biggest annual gain since 1973. Fiber reached a record $ 1.5195 on November 10 on signs that producers would struggle to meet mounting demand in China, the world's largest consumer.

Deposits inventories monitored by the ICE have plunged 72 percent this year.

U.S. Harvest will be 0.8 percent lower than estimated last month, the USDA said. Total output of 18.27 million bales in the crop that is ending below the projected 18.42 million in November, the USDA said, reducing its estimate for the second consecutive month. The previous crop was 12,190,000 bales.

China Prices

China's cotton price can not "strengthen" in the short term due to monetary tightening policies by the government, China National Cotton Reserves Corporation, the state's reserve manager of cotton, wrote in a research report by state-owned Assets Supervision and Administration Commission today.

Cotton for delivery in September rose to 3.7 percent from the previous close of 28.245 yuan ($ 4.245) per tonne before trading at 27,970 yuan in Zhengzhou Commodity Exchange at 11:30 am local-time closing .

Demand in China is expected to outstrip supply by 17 million bales in the year ended July 31, according to the USDA forecast.