Cotton gains on crop damage woes, firm oil market
Oct 7 (Reuters) -ICE cotton futures rose on Monday, helped by stronger oil prices and worries over impact on crops in key growing areas due to storm Helene, although demand concerns and a firm U.S. dollar kept gains in check.
* Cotton contracts for December CTZ4 rose 0.4 cent, or 0.6%, at 73.71 cents per lb at 11:17 a.m. EDT (1517 GMT).
* "The market is worried that there's a little more damage done on crops than thought earlier due to Helene. Also, higher oil prices are little bit of a positive for cotton," said Rogers Varner, president of Varner Brokerage in Cleveland.
* "However, demand has been mediocre for several months. If demand had been just medium, I think the price would be 5 cents higher today, but demand has been disappointing."
* North Carolina, Florida and much of the South are still recovering from the massive destruction caused by Helene, which killed more than 200 people across six states.
* Oil prices extended gains, with Brent nearing $80 to build on last week's steepest weekly jump since early 2023, driven by fears of a wider Middle East conflict and potential disruption to exports from the major oil-producing region. O/R
* Higher oil prices make cotton-substitute polyester more expensive.
* Weighing on cotton, the dollar .DXY hovered near its highest level in seven weeks, making cotton more expensive for other currency holders. USD/
* Cotton speculators cut their net short position by 3,507 contracts to 33,427 in the week of Oct. 1, CFTC data showed on Friday.
Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber
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