NEW YORK, July 3 (Reuters) – Cotton futures rose on Monday for the fourth day, although it gained less than other commodities due to concerns about a global surplus of the fiber.
Benchmark December cotton on ICE Futures U.S. rose0.8 percent to settle at 72.60 cents per lb, holding the two-week highs hit the previous day. Trading volumes were lower on the eve of the U.S. Independence Day holiday.
Cotton prices got a boost from grains, which surged due to fears that relentless heat would damage crops. Soybean prices jumped to their highest levels since 2008.
Cotton has underperformed the broader commodities market due to concerns about a global oversupply. The 19-commodity Thomson Reuters-Jefferies CRB index gained more than 2 percent to a six-week high on Tuesday, boosted by a stronger euro and short-covering.
The blazing heat and drought stretching across the U.S. Corn Belt have not affected cotton-growing areas, although traders said they are hoping for rainfall in key-growing areas of Tennessee, Mississippi and Louisiana soon.
“In the mid-south, we’ve been without rain for three weeks. There’s a concern, although it’s not yet critical. If there’s still no rain this time next week, cotton will start moving up,” said a major U.S. trader.
Cotton is hardier than grains and can survive on less water.
In contrast to the United States, rains in North East China and India, other major growing regions, are expected to help crops, which has raised concerns about oversupply, he said.
(Editing by David Gregorio)