Commodity Blog

Commodity Prices – Cotton

Corn fell on the forecast that the US farmers will increase planting this year and on the speculation that the advance of prices weakened demand. Goldman Sachs Group Inc. predicted that the US farmers will sow 92.1 million acres of corn this year. According to the US Department of Agriculture, the farmers have sown 88.2 million acres of corn last year. May delivery for corn fell $0.1 (1.5 percent) to $6.765 per bushel by 12:14 on CBoT.

Cotton jumped by the exchange limit on ICE on the speculation that rains will curb supplies from Australia. The wet weather may slow the harvest that starts this month. Prices have more than doubled in the past year as the global demand rises while the supply declines. May delivery for cotton surged by the limit of $0.07 (3.5 percent) to $2.0596 per pound as of 14:39 on ICE.

Cocoa rallied to the highest price since 1979 on the concerns that the political tensions in Ivory Coast will curb supplies. Incumbent President Laurent Gbagbo refused to give away power to his rival Alassane Ouattara after the elections. The probable civil war would likely be negative for cocoa supply. May delivery for cocoa rose $14 (0.4 percent) to $3,747 per metric ton as of 7:31 on ICE.

Cotton jumped to the record today on the prediction that demand will continues to exceed supply. US exports of cotton climbed 56 percent to 403,341 bales in the week ended February 24 from the previous week. The National Bureau of Statistics reported that production in China, the largest consumer in the world, slid 6.3 percent in 2010. Prices more than doubled last year. May delivery for cotton advanced by the exchange limit of $0.07 (3.4 percent) to $2.127 per pound, the all-time record, by 14:47 on ICE.

Copper headed to its first weekly gain this month as the signs of the global recovery outweigh the concerns about the situation in Middle East. The positive reports from the US, especially the employment data, bolstered the confidence in good state of the economy. Futures for copper traded at $4.5105 per pound on COMEX after advancing 0.5 percent to $4.5120.

Soybeans gained on the concern that rains in Brazil may cause flooding, slowing the harvest and harming the quality of the crops. World inventories of soybeans are expected to decline to 58.2 million metric ton, the lowest level in two years, according to the estimates of the US Department of Agriculture. May delivery for soybeans rose $0.14 (1 percent) to $13.8925 per bushel at 13:09 on CBoT.

Copper fell on the concern that the surging oil prices will slow the global economic recovery, diminishing demand for the industrial metal. Oil continues its rally on the tensions in Libya. May futures for copper delivery fell $0.0115 (0.3 percent) to $4.498 per pound by 13:22 on COMEX.

Cotton jumped on the speculation that supply will trail demand. The Chinese imports surged 31 percent January from a year ago, following the jump by 86 percent in the previous year, while the output in the country fell by 6.3 percent in 2010. May delivery for cotton gained by the exchange limit of $0.07 (3.6 percent) to $2.006 as of 14:55 on ICE.

Cotton jumped to a record for the second straight day on the signs of strong demand for fiber from the US. The US Department of Agriculture reported that exports increased 26 percent as of February 3 from a week ago. The USDA predicted that production in the year ending July will total 115.25 million bales, 0.2 percent lower than in the January forecast. March delivery for cotton climbed $0.37 (9 percent) to $1.8758 per pound on ICE. Prices jumped 12 percent this week.

Another commodity posting a second day of records today was corn as demand grew, putting strain on inventories. US export sales advanced 51 percent in the week ended February compared to the previous four weeks, according to the USDA report. The US stockpiles of corn will be equal to about 18 days of consumption before the next harvest, near the record low of 1996. March futures for corn delivery gained $0.005 (0.1 percent) to $6.985 per bushel by 13:15 on CBoT, reaching $7.045 earlier, the highest price for the most-active contract since July 2008.

Oil extended its gains for a second day on concerns about the situation in Egypt. Yesterday clashes broke out between the protesters and the supporters of the current government. The contract for delivery of crude oil in March rose $0.41 (0.5 percent) to $91.27 per barrel on NYMEX.

Cotton jumped to the record as floods in Australia and Pakistan cut supplies. According to reports, Australia lost 300,000 bales, while Pakistan has a shortfall of 2.5 million bales. March futures for cotton delivery gained $0.04 (2.3 percent) to the record price of $1.7622 per pound as of 14:49 on ICE.

Copper prices also climbed to the record as the global economic growth have put strain on stockpiles. LME copper inventories dropped by 150 metric tons to 393,775 tons yesterday. Copper for delivery in Copper for March advanced 0.8 percent to $4.58 per pound on COMEX.

Crude oil fell as rising numbers of jobless claims in the US caused concerns that demand for a fuel may wane. Claims for unemployment benefits rose from 403,000 to 454,000 in the US last week. Oil also weakened as the US crude oil inventories increased by 4.8 million, while they were expected to increase by only 0.9 million. March delivery for crude oil dropped $0.47 (0.6 percent) to $85.17 per barrel on NYMEX. So far, prices were down 6.6 percent this year.

Cotton futures jumped to the record as supply struggles to catch up demand from China. China imported 2.84 million metric tons last year, the most since the record of 3.47 million tons in 2006. March delivery for cotton rose as much as $0.0256 (1.5 percent) to $1.6939 per pound on ICE by 14:58, following the previous jump to the record $1.7283 per pound. Prices have more than doubled in the last year.

Soybeans futures touched the highest level in 28 months as demand in China recovered. According to Grain.gov.cn, China’s December soybean imports may total 5.3 million tons. US exporters sold 827,810 metric tons of soybeans in the week ended December 16th. March futures for soybean delivery advanced $0.2025 (1.5 percent) to $13.60 per bushel by 13:15 on CBoT.

Cotton slumped yet again by the most allowed on ICE, after a drop yesterday, on speculation that India, a biggest producer in the world, will resume its exports. India announced that it’s going to allow exports of 2.5 million bales (1 bale=375 pounds=170 kilograms). Cotton also slid as record prices erased demand. March delivery for cotton tumble by the exchange limit of $0.06 (3.9 percent) to $1.4812 per pound as of 14:30 on ICE.

Crude oil reached the highest level in more than two years after a report showed that US inventories of crude declined more than expected. The inventories dropped 5.33 million barrels to 340.7 million last week, while a 3.4 million-barrel decline was predicted. February delivery for crude oil gained $0.66 (0.7 percent) to $90.48 per barrel on NYMEX, the highest level since October 3rd, 2008.

Sugar gained today on speculation that India may delay new exports. India’s government will review its export policy at the end of January. March delivery for raw sugar climbed $0.0011 (0.3 percent) to $0.3313 by 14:00 on ICE.

Cotton dropped by the exchange limit on ICE today on speculation that demand may wane after prices rallied to a record. March futures for cotton delivery slipped as much as $0.05 (3.1 percent) to $1.5412 per pound as of 14:36 in New York. The price reached a record of $1.5912 yesterday.

Sugar advanced today to the highest level in 29 years on forecast that global supplies will trail demand. World sugar consumption will exceed production by almost 3 million metric tons in the year ending September 30th. March delivery for raw sugar advanced $0.0046 (1.4 percent) to $0.3296 per pound as of 14:00 on ICE.

Crude oil gained today on signs that US economy recovers, increasing demand in the biggest oil-consuming country. Experts predict a report this week will show that growth of US gross domestic product accelerated. January delivery for crude oil gained $0.79 to $88.81 per barrel on NYMEX.

Cotton was also bolstered by an anticipation of increasing demand in the US. The Thomson Reuters/Jefferies CRB Index of 19 raw materials jumped to the highest level in more than two years. March futures for cotton delivery rose $0.04 (2.7 percent to the record $1.5412 per pound by 14:43 on ICE.

Sugar jumped today on signs on lower output from Brazil, the largest producer in the world. Output was 18 percent lower than a year ago in Brazil’s Center South, the biggest growing region. As harvest usually end in December, it’s very unlikely to improve significantly. March delivery for raw sugar gained $0.015 (4.8 percent) to $0.325 per pound as of 14:00 on ICE.

Cotton climbed as output tumbled 22 percent in Shandong province, the second largest producer in China, which is biggest grower in the world. Increasing demand and lack of supply boost appeal of the commodity. March futures for cotton delivery gained $0.04 (2.7 percent) to $1.5012 in New York. The price almost doubled this year because of global deficit.