Commodity Blog

Commodity Prices – Cotton

Cattle futures gained on signs of increasing demand for U.S. beef. Wholesale beef, shipped by meatpackers in the week that ended yesterday, climbed as much as 44 percent to 43 million pounds, compared to 29 million pounds in the week earlier. October futures for cattle delivery rose $0.00875 (1 percent) to $0.92275 per pound on CME.

Cotton futures rebounded as the weaker dollar boosted demand for some commodities as an inflation hedge. The U.S. currency dropped to the lowest level in two months versus the basket of six currencies. December delivery for cotton gained $0.0086 (1.2 percent) to $0.7465 per pound on ICE Futures U.S.

Copper and aluminum prices rose after aluminum producer Alcoa Inc. reported that its earnings were higher than expected. Alcoa Inc. forecast that global aluminum demand would grow 12 percent in 2010. September futures for copper delivery added $0.0085 (0.3 percent) to $3.0175 per pound on COMEX. Aluminum rose 1.2 percent to $1,995 per metric ton on LME.

Cotton and soybeans dropped today on signs of increasing output. U.S. farmers planted cotton on the area, 19 percent wider compared to the previous year. The soybeans seeded area will be 1.8 percent wider compared to the last year and will reach the all-time record, while combine output of Brazil and Argentina will grow by 37 percent. December delivery for cotton slid $0.0051 (0.7 percent) to $0.7762 per pound as of 9:50 on ICE. November futures for soybean delivery slipped $00325 (0.4 percent) to $9.0875 per bushel by 11:03 on CBoT.

Raw sugar climbed to the weekly high level on forecast that output in India would be reduced by adverse weather. Production in Thailand may also fall; it expected to decline by 13 percent. October delivery for raw sugar rose $0.0041 (2.7 percent) to $0.1569 per pound as of 11:50 on ICE Futures U.S.

Copper rebounded today as the concern for the global recovery eased after the report about the increased manufacturing in the U.S. Chicago PMI index value of 59.1 in June indicated an increase, as figure above 50 signals about growth. September futures for copper delivery gained $0.0165 (0.6 percent) to $2.947 per pound at 12:20 on COMEX.

Sugar futures were shifting from losses and gains, after jumping to the highest level in nine weeks in New York on speculation that demand would remain at the present level. Complicated credit situation and high prices depleted sugar inventories last year, prompting consumers to restock their supplies and supporting demand. October delivery for raw sugar slid $0.0001 (0.1 percent) to $0.1618 per pound on ICE Futures U.S. October futures for white-sugar delivery added $10.60 (2.3 percent) to $478.70 per metric ton on the Liffe exchange.

Hog and cattle futures gained on prospect for resuming imports of U.S. chicken to Russia would cause the U.S. meat supplies to dwindle. Russia, previously the biggest consumer of U.S. chicken, has agreed to lift a five-month-old ban on the meat after yesterday’s meeting of U.S. and Russian presidents. August futures for hog settlement advanced $0.00225 (0.3 percent) to $0.83475 per pound by 10:57 on CME. August futures for cattle delivery rose $0.0025 (0.3 percent) to $0.894 per pound.

Cotton prices rose on outlook for increasing demand from mills in the U.S., the biggest exporter of the fiber. U.S. mills used the fiber at an adjusted annual rate of 3.582 million bales in May, compared to the April rate of 3.48 million and up 7.6 percent compared to the previous year. December delivery for cotton gained $0.0028 (0.4 percent) to $0.79 per pound at 10:10 a.m. on ICE.

Soybeans rose on today on the speculation that unusually wet weather will halt planting in the U.S. Precipitation in some parts of the U.S. was six time of the normal amount. November futures for soybean delivery gained $0.055 (0.6 percent) to $9.305 per bushel on CBoT.

Cotton dropped today on forecast that production in the U.S. will surge. In the current season U.S. production predicted to reach as much as 16.7 million bales in the year beginning August 1st, compared to the previous estimates of 12.2 million. In the next season output expected to grow even more, especially in Texas. Hedge-fund managers and other large speculators reduced their net-long positions to the lowest level in nine months by June 8th. December delivery for cotton slid $0.0047 (0.6 percent) to $0.7895 per pound on ICE Futures U.S.

Orange-juice futures dropped on forecast that the crop in Florida, the second biggest producer in the world, would be bigger than previously predicted. Forecast says that yield would total 133.6 million boxes in the harvest ending in July, 1.5 percent up from previous estimates. July futures for orange-juice delivery declined $0.0045 (0.3 percent) to $1.3785 per pound yesterday on ICE.

Cotton prices climbed today to the highest level in a week after exports in the U.S. jumped amid speculation that the global economic recovery would retain its pace, boosting the demand. U.S export sales of cotton jumped to 624,200 running bales in the week ended June 3rd, more than three times compared to the week before. December delivery for cotton jumped $0.0144 (1.9 percent) to $0.7907 per pound on ICE Futures U.S. in New York.

Wheat gained today after the U.S. government predicted that domestic inventories of corn, which is used for feeding livestock, would decline more than expected. Stockpiles expected to fall to 1.603 billion bushels by the end of the marketing year on August 31st. July futures for corn delivery went up $0.05 (1.5 percent) to $3.4325 per bushel on CBoT.

Cotton halted its rally and dropped today after Euro-zone debt crisis caused commodity prices to decline. Prices were also influenced by the stronger dollar as it curbed exports from the U.S., making U.S. goods too expensive to overseas buyers. Economists weren’t concerned by this move of prices as they consider such correction after rally quite normal. July delivery for cotton dropped $0.0106 (1.3 percent) to $0.8222 per pound as of 10:09 on ICE.

Copper prices went down after the dollar was boosted by troubles in the European Union. China tries to slow down growth of its economy, lowering demand for copper. Inventories of LME-monitored copper rose 3.3 percent today on speculation that prices dropped too much this month while stockpiles of the metal are dwindling. July futures for copper delivery went down $0.0465 (1.6 percent) to $2.913 per pound by 10:43 on the COMEX in New York.

Cotton gained today on speculation that an unfavorable weather in China will decrease supplies of the fiber. Prices also rose after the dollar fell, increasing demand for some raw materials. July delivery for cotton gained $0.01 (1.2 percent) to $0.822 per pound by 9:49 on ICE Futures U.S. in New York.

Cattle advanced, while hogs fluctuated, boosted by the weaker dollar and by prospect for higher demand. Speculation arose that recent decline of futures because of concern about the stronger dollar was overdone. Prices may also climb as Memorial Day draws near, increasing demand for meat. Yet concern remains that consumer demand may fall with higher prices for meat, driving livestock futures down together with meat prices. August futures for cattle delivery rose $0.004 (0.4 percent) to $0.916 per pound as of 11:25 on the Chicago Mercantile Exchange. July futures for hog settlement lost $0.001 to $0.815 per pound on CME.

Cotton futures slid to the lowest level in four weeks today as the stronger dollar cut a demand for some commodities as alternative assets. The U.S. dollar jumped against the euro on a concern that the debt crisis will spread from Greece to other European countries. Some commodities, including cotton, felt the impact of this situation. July delivery for cotton slid $0.0223 (2.7 percent) to $0.7985 per pound on ICE Futures U.S. in New York.

Sugar dropped to the lowest level in a year on the prediction that growing supplies from Brazil and India will curb the global deficit. Production in Brazil’s Center South, the biggest growing region, in the world, surged 77 percent in the first half of April. The production deficit will total 8 million metric tons this year, compared to the February estimate of 9.4 million tons. July delivery for raw sugar dropped $0.0074 (5.1 percent) to $0.1367 per pound on ICE.

Cotton futures declined as the stronger dollar decreased an attractiveness of commodities as alternative assets. Earlier waning production and growing demand pushed cotton prices up. July delivery for cotton dropped $0.0056 (0.7 percent) to $0.8267 per pound as of 9:25 on ICE.

Sugar fell today on an outlook that an output in India will exceed a demand, causing the biggest buyer in the world to become an exporter. Analysts think that the sugar price may drop below $0.14 per pound soon. July delivery for raw sugar went down $0.004 (2.7 percent) to $0.1458 per pound at 10:23 on ICE Futures U.S.

Copper dropped today to the lowest level since February 25th, weakened by a concern that the manufacturing in China may slow as the government tries to rein the overheating economy, causing a demand for the metal to decline. European budget deficit problems caused speculation that the global demand for copper may fall too. July for futures copper delivery fell $0.099 (3 percent) to $3.1945 per pound by 11:31 on the Comex in New York.

Iron ore prices fell in China, the largest consumer in the world, over the past week on a speculation that a demand will decline as the government plans to cool the property market. The fastest economic expansion in almost three years and fast prices growth caused the Chinese government to cool its real estate market this month. These measures resulted in a drop of domestic prices for iron ore and may be followed by decline of import prices. A demand for iron and steel may fall because such measures can reduce construction. Domestic prices for iron ore dropped yesterday 6.4 percent to 1,310 yuan ($192) per metric ton from a record 1,400 yuan on April 20th in Tangshan, China’s largest spot market for the material.

Cotton futures dropped after the strengthening dollar decreased a demand for some raw materials as an alternative investment. The dollar rose as much as 0.7 percent against a basket of six major currencies. July delivery for cotton fell $0.0074 (0.9 percent) to $0.8446 per pound by 1:27 on ICE Futures U.S. in New York.