Cotton prices eked out a gain Tuesday after five sessions of losses, with a rainy forecast in the Texas Panhandle leading traders to bet the U.S. could plant less of the crop.

Cotton for July climbed as high as 64.66 cents a pound at one point but ended up 0.01 cent at 63.31 cents a pound on the ICE Futures U.S. exchange. Prices had fallen 5.3% cumulatively over the previous five sessions.

Heavy rains have hit Texas, the largest cotton-growing state in the U.S. Most of the cotton is grown in West Texas, which is recovering from a four-year drought. Many areas haven’t seen more than two days in a row without rain this month, analysts said, which has made it difficult to plant crops.

In addition, some regions of Texas and Oklahoma are approaching an insurance deadline. Ahead of that, farmers can cut their losses and take an insurance payment rather than plant cotton. With cotton trading below 65 cents a pound, many farmers have decided to hedge their bets by switching half their acres to other crops, said Louis Rose, founder of commodities-consulting firm Risk Analytics.

The mid-south region of the country—which encompasses Missouri, Tennessee, Arkansas, Mississippi and Louisiana—could be 10% to 15% short of the U.S. Department of Agriculture’s March 31 planting projections, Mr. Rose said. One million to 1.5 million cotton acres are at risk of being used for other crops for the 2015 marketing year, which begins Aug. 1, he said.

“We can plant cotton pretty quick,” Mr. Rose said. “This is a rare year where [the weather] just doesn’t cooperate. The market is reacting.”

However, John Robinson, a professor and specialist in cotton marketing at Texas A&M University, said he thinks the rains will help cotton growers. Many growing regions of Texas where insurance deadlines are still a month away are likely to plant cotton and enjoy greater yields because of the rain, Mr. Robinson said.

“They’ve got time,” he said.

In other markets, frozen concentrated orange juice for July shed 3.4% to close at $1.1455 a pound, the biggest drop for the most actively traded contract since April, after the Florida Department of Citrus released data showing continued slumping demand for the beverage.

U.S. consumers bought 35.88 million gallons of orange juice, down 8.7% from the same four-week period a year earlier. Retail sales have fallen on a year-to-year basis for about two years as more exotic competitors in the juice market and health concerns weigh on the onetime breakfast staple.

Raw sugar for July delivery fell 1.9% to end at 12.08 cents a pound, the lowest close in nearly two months, after the International Sugar Organization increased its estimate for the amount by which production will exceed supply this year. The group said it expects the global supply surplus to reach 2.2 million metric tons, up from its previous estimate of 620,000 tons.

Cocoa for July delivery fell 0.1% to $3,150 a ton, and July arabica coffee slumped 2.3% to $1.2405 a pound, the lowest settlement since Jan. 30, 2014, for the most actively traded ICE coffee contract.

Source - http://www.wsj.com