Cotton Futures Fall Sharply

Cotton futures prices fell sharply Friday on the Cotton Exchange in New York as threats of crop damage from Hurricane Danny dissipated.

Rick Lorusso, a cotton analyst with Shearson Lehman Bros., said prices rallied earlier in the week on concern that the hurricane might move inland and damage the crop. But prices fell Friday after the hurricane dwindled to a tropical depression.

“In most instances, hurricanes in the Gulf of Mexico have produced temporary rallies. But the perceived threat never materializes in terms of damage,” Lorusso said.

He noted also that agricultural commodities in general were under pressure because of oversupply. Cotton prices fell to life-of-contract lows.

Cotton settled 0.6 cent to 1.04 cents lower with the contract for delivery in October at 57.90 cents a pound.

Gold prices rallied sharply in heavy trading on the Commodity Exchange in New York for the second straight day.

While the political tension in South Africa has been mentioned as a factor supporting prices, several analysts said economic conditions were the main catalyst.