Cotton is getting a lot more expensive.
Driving the news: Futures contracts shot up this month as heavy rains in Texas and the Mississippi Delta endanger the cotton crop — catching traders with short positions by surprise and setting off a short squeeze, Bloomberg reports.
Why it matters: The cost to produce clothing is on the rise, which apparel makers and retailers may look to pass on to consumers.
Details: The U.S. is the largest cotton exporter, and worldwide demand has been increasing, according to Bloomberg.
- Shipping constraints are also contributing to the price rally.
What to watch: Prices may rise further amid more short covering of large outstanding positions, the report says.