Commodity Blog

Commodity Prices - Cotton

Corn and wheat slid today on speculation that demand is shifting from U.S. grain. Lower quality of U.S. corn crop may result in business shifting to supplies from competing nations. May futures for corn delivery fell $0.0225 (0.6 percent) to $3.695 per bushel by 10:26 on the Chicago Board of Trade.

Cotton price reached the highest level since July 2008 on signs that the dollar will decline, increasing the demand for commodities as a hedge against inflation. The dollar dropped 0.2 percent versus a basket of six major currencies before rebounding. May futures for cotton delivery advanced $0.0037 (0.5 percent) to $0.7648 per pound as of 11:28 on ICE.

White sugar declined in London today as technicals signal that further drops may lie ahead. Prices also slid as the dollar rebounded, curbing appeal of commodities priced in U.S. currency. May delivery for white sugar slipped $10 (1.4 percent) to $704 per metric ton on the Liffe exchange.

Cotton price touched the lowest level since November as the stronger dollar curbed the demand for the commodity as an alternative investment. The greenback reached the highest level versus basket of six major currencies since July. Price also rose as declining equities caused concern that the economic rebound may be slow. March cotton delivery slid $0.0159 (2.3 percent) to $0.674 per pound at 11:55 a.m. on ICE Futures U.S. in New York.

Wheat prices went down in Chicago as oversees buyers moved to cheaper supplies. U.S. grain was considered overpriced as wheat from Russia, France and Kazakhstan was sold to Egypt for $174.90 per metric ton, while U.S. wheat was priced at $184.91 per ton. March futures for wheat delivery dropped $0.025 (0.5 percent) to $4.7325 per bushel on CBoT.

Sugar futures rose on speculation that the global deficit will be higher than forecasted. Analysts say that “sugar has favorable technicals and fundamentals”. March futures for raw-sugar delivery added $0.0012 (0.4 percent) to $0.294 per pound on ICE Futures U.S. in New York.

Wheat futures gained in Chicago on forecast that supplies may decline because farmers in the U.S. cut selling after prices dropped last month to the lowest level since June. Prices are also aided by expectation of rising demand for U.S. wheat. March futures for wheat delivery went up $0.125 (2.6 percent) to $4.8725 per bushel on CBoT.

Cotton prices rose, ending the longest decline since September 2008, on outlook for improving demand in China, the biggest buyer of the fiber in the world. The area planted with cotton may decrease by 4.9 percent and reductions in the crop supply may cause Chinese textile producers to increase imports. March futures for cotton delivery gained $0.0104 (1.5 percent) to $0.6926 per pound on ICE.

Cotton prices tumbled, continuing the longest decline since September 2008, on investor concerns that harsh banking regulations may curb commodity trading. Traders limit their purchases and sales until rules will be clear to minimize risk of money loss. March futures for cotton delivery waned $0.0048 (0.7 percent) to $0.6855 per pound as of 11:23 on ICE.

Gold gained on speculation that the dollar’s advance will slow, increasing appeal of the precious metal as an inflation hedge. The U.S. currency slid as much as 0.5 percent versus the euro. A rising deficit in the U.S. forces investors to buy hard assets like gold and oil. April futures for gold delivery added $15.40 (1.4 percent) to $1,099.10 per ounce by 11:27 on the New York Mercantile Exchange’s Comex unit.

Cotton prices dropped on speculation that the U.S. economy may be slow to rebound, cutting demand for the fiber. Retailer sales in the U.S. unexpectedly declined in December and unemployment is expected to average 10 percent in 2010, indicating that a pace of an economic rebound is slow. March futures for cotton delivery fell $0.0082 (1.1 percent) to $0.7261 per pound as of 11:22 on ICE.

Crude oil tumbled as retail sales fell and jobless claims increased, signaling that the economic recovery is slow. Weekly jobless claims rose as much as 2.5 percent, to the highest level in five weeks. Analysts think that fundamentals may force crude prices down to the $70 per barrel level after the end of the winter. February delivery for crude oil slid $0.26 (0.3 percent) to $79.39 per barrel by 14:30 on the New York Mercantile Exchange.

Cocoa reached the record in almost a month in London on outlook that demand will be supported by increasing usage in Europe. Cocoa usage in the Europe jumped 0.6 percent to 351,316 tons in the fourth quarter and indicator of demand, cocoa grindings, rose as much as 9.4 percent to 95,834.2 metric tons in Germany in the period. March delivery for cocoa added 0.4 percent to $3,403 per metric ton at 17:39 on ICE.

Dubai’s attempt to delay debt repayments made traders shun assets, which they perceive as carrying greater risk, causing decline in prices for commodities, including copper and cotton. The dollar rebound versus six major currencies also caused decline in prices for commodities. March futures for copper delivery declined $0.0715 (2.2 percent) to $3.1255 per pound on the Comex division of the New York Mercantile Exchange. March futures for cotton delivery dropped $0.0138 (1.8 percent) to $0.7384 per pound on ICE Futures U.S. in New York.

Sugar prices rose New York as growing global demand increased sales. Sugar prices climbed 93 percent this year as bad weather conditions inflicted cane yield in Brazil and India, causing a worldwide deficit. Prices were also aided by demand from Bangladesh, Pakistan and Indonesia. March futures for raw-sugar delivery increased $0.0045 (2 percent) to $0.2277 per pound on ICE.

Consumption of aluminum may continue to rise in Asia next year as stimulus measures in China, the greatest consumer of the metal in the world, and rest of the region increased demand for the metal. China’s economy growth touched 8.9 percent in the third quarter, being the fastest in a year. Aluminum prices rose 32 percent in China this year. Analysts predict that demand will exceed supply by 380,000 tons next year and prices will average $2,700.

Cotton gained for the fifth straight session as high prices for cotton in Chinese markets boosted the attractiveness of cotton. Unwillingness of cotton holders to deliver supplies against December contracts also helped cotton prices. March futures for cotton delivery gained $0.0058 (0.8 percent) to $0.7506 per pound by 12:44 on ICE Futures U.S. in New York.

Hog futures jumped to a five-month high as declining U.S. pork inventories signaled that global demand for the meat may be growing. Despite extensive hog slaughter demand may rise occasionally and supplies may be not enough to meet it, analysts say. Pork inventories declined 1.5 percent from the previous year to 520.13 million pounds. February futures for hog settlement climbed $0.0165 (2.6 percent) to $0.66025 per pound by 11:11 on the Chicago Mercantile Exchange.

Wheat gained on expectation that a declining dollar will increase the demand for commodities as an inflation hedge and boost U.S. exports. Another reason for the rising price is concern that U.S. farmers will plant fewer winter wheat as rainfalls delayed the corn and soybeans harvests, lowering the amount of land available for wheat. March futures for wheat delivery gained $0.0975 (1.7 percent) to $5.905 per bushel at 11:46 on CBT.

Cotton reached a 16-month high after the weaker dollar spurred demand for the commodity. The declining dollar is pushing down the cost to overseas buyers for U.S. commodities. Holders of cotton are unwilling to deliver supplies against the December futures contract. March futures for cotton delivery added $0.0066 (0.9 percent) to $0.747 per pound as of 12:51 on ICE.

Cotton futures reached the two-week high as demand as a falling dollar increased the demand from speculators for the U.S. exports. The dollar weakness makes commodities from the U.S. cheaper for overseas buyers, supporting cotton prices. Commodities are also used by investors as a hedge against inflation. December futures for cotton delivery gained $0.011 (1.7 percent) to $0.6876 per pound as of 9:18 on ICE Futures U.S. in New York.

Coffee advanced in New York as a declining dollar lowered pressure on the market. The dollar dropped 0.8 percent against the euro. Many sellers aren’t working today in Brazil because of a public holiday, therefore also easing selling pressure on market. December futures for Arabica-coffee delivery advanced $0.135 (1 percent) to $1.3685 per pound by 10:25 on ICE.

Copper tumbled from a 13-month high in New York as the dollar rebounded, lowering the attractiveness of the metal as an inflation hedge. The dollar went up on speculation that China may cut investments to stimulate economy as the country’s gross domestic product grew fastest in a year in the third quarter and inflation sped up. Production of copper and aluminum in China increased 8 percent in September from the prior month, leading to concern about excess production. December delivery for copper slid $0.0345 (1.1 percent) to $3.0015 per pound by 9:48 on the New York Mercantile Exchange’s Comex unit.

Cotton prices slumped this week as the dollar gained, eroding the attractiveness of commodities from the U.S. The dollar rebounded against the euro after reaching a 14-month low yesterday. Declining exports also have negative impact on cotton prices. December futures for cotton delivery slumped $0.0042 (0.6 percent) to $0.6796 per pound as of 11:59 on ICE Futures U.S. in New York.