Daily Adventures In 'Limit Up' Zimbabwefication: Cotton Explodes As Asian Mills Panic

Tyler Durden's picture

It seems like so long ago that we noted that cotton was up over 17% year to date. Alas it was yesterday. Yet the time-lag effect is not surprising considering that less than 24 hours following our initial report cotton is now up 23% YTD, or a 5% pick up in one day! This was yet another limit up day for one of the world's most popular commodities, which closed at $169.72, a 150 year high. The reason, per Reuters, for the relentless surge in cotton's price is Asian mills: "It's basically mills panicking," said Lou Barbera, a cotton analyst for brokerage VIP Commodities. "Overseas mills are getting the ball rolling." In reality, mills are just one part of what is rapidly becoming a perfect storm for a commodity which will soon destroy margins for all mid-tier retailers: "Powerful cyclone Yasi in Australia also worried the market because it would hit prime cotton-growing areas. Losses there could further crimp supplies in Asian markets, dealers said. Sharon Johnson, senior cotton analyst at brokerage Penson Futures in Atlanta, said it is "possible there's a squeeze" in the U.S. cotton market."

And as if that was not enough, here are the catalysts for the immediate future, which may well continue pounding cotton limit up day after day:

On Thursday, the market will look at the U.S. Agriculture Department's weekly export sales report to gauge demand for U.S. cotton.

The market will then turn its attention to industry group the National Cotton Council of America which will release its annual plantings survey for cotton at its annual meeting in San Antonio, Texas on Friday.

A Reuters survey at the Beltwide Cotton conference this month had forecast U.S. 2011 cotton plantings from 12.48 million to 12.53 million acres, a 5-year high and an increase of around 15 percent from last year's cotton sowings of 11.04 million acres.

No matter what the reason, we wonder how long before the Fed realizes that its CPI indicator is a complete joke when juxtaposed witch charts such as these:

And YTD:


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SheepDog-One's picture

Cant eat cotton...well unless of course someone perfects the 'chocolate covered cotton' they were trying to peddle in Catch-22.

william the bastard's picture


Egypt is the world's largest exporter of cotton and its textile industry is also large.  That might something to do with today's cotton prices.

Read more: Egypt Overview of economy, Information about Overview of economy in Egypt http://www.nationsencyclopedia.com/economies/Africa/Egypt-OVERVIEW-OF-ECONOMY.html#ixzz1Cq6U41Cn


Joe Davola's picture

when the government's gettin' overthrown

you can't pick very much cotton

Pladizow's picture

Self fullfilling prophacy?

Dollars are made from cotton, the more dollars that are printed the higher the price of cotton goes....

Or something like that?

Malcolm Tucker's picture


You're not going to believe this...and I mean that !


Implies that Illuminati = NSA ...at least backwards!


tekhneek's picture

AND I'm not going to read it! OR click it!

hbjork1's picture

Ah yes:

"I wish I was in the land of cotton,
old times there are not forgotten,
Look away, look away, look away, Dixie land.
In Dixie land where I was born in, early on a frosty mornin',
Look away, look away, look away, Dixie land. "


BurningFuld's picture

Good thing I just got a new set of sheets for the bed!

Sudden Debt's picture

And I just stocked enough cotton swabs that will last me for a couple of years ;)


Some bought Ammo

Some bought Food



Blindweb's picture

Cotton seed oil, one of those cheap fillers they degrade the food supply with.

Mad Max's picture

cottonseed oil = toxic crap

If it's an ingredient in something, you don't want to eat that thing.

tmosley's picture

Remember it isn't the oil that is toxic.  It's just that they spray a lot of chemicals on the cotton that (supposedly) get into the oil.

You should be able to do some GC to determine whether there really are any pesticides left.

william the bastard's picture

There's no subject you're not an expert on.

tmosley's picture

It's hard for a layperson not to know anything about cotton in Lubbock.  It's impossible for a chemist.  My group has collaborated with the International Textile Center, and I have long standing friendships with a number of food chemists.

So yeah, I know a lot of stuff.  Unlike you, with your head full of shit.

tmosley's picture

Ok.  If anyone needs me, I'll be "Takin' It Easy".


Cheesy Bastard's picture

If it's easy, take it twice.

hbjork1's picture


I am so old that I actually picked cotton during the 40's.  Yep, one of those people out in the field pulling a sack.  I liked the job because workers were paid by the pound.  Rates when I was active were $2-$3 dollars/ hundred.  My max was about 250 lbs. per day.  People today will think that was pretty sad but the dimes quarters, halves and dollars were made out of or backed by 90% silver. (We have had inflation.)

Some boys started at around age 12 (There was a war on; child labor was useful.) I gave it up at about age 16.  I could make more money in construction.

Cotton grown for oil extraction is one of the big four genetically modified crops grown around the world, next to soy, corn, and rapeseed (canola), mostly Monsanto products.[1][2]

This from Wikipedia:

"The cottonseed has a similar structure to other oilseeds such as sunflower seed, having an oil bearing kernel surrounded by a hard outer hull; in processing, the oil is extracted from the kernel. Cottonseed oil is used for salad oil, mayonnaise, salad dressing, and similar products because of its flavor stability.[3] The cottonseed oil undergoes intensive treatment after extraction to reduce the level of gossypol found in untreated cottonseed oil, the consumption of which may produce undesirable side-effects.[4]"

tmosley's picture

Modern cotton plants have been modified such that there is no longer any gossypol in the seeds.

Gossypol is sort of interesting.  It is being investigated as a method to increase the effectiveness of chemotherapy on cancer patients.

ColonelCooper's picture

Let's see, a chemist discussing the effect of spraying chemicals on a plant.  Yep.  Seems like a stretch to me.

The Grip's picture

wtf is gc? gas chromatography?

hbjork1's picture

Cotton candy- Spun melted sugar.

qp's picture

Carpet beetles eat cotton......

(Bed Bugs & Beyond)

d00daa's picture

So once again, Hairy Wanker, the question is:


What is 17...... er ..... 23% ANNUALIZED???

FOC 1183's picture

Brilliant!  Why didn't Weimar think of that.

Sancho Ponzi's picture

HarryWanQer? How many of you are there?

Bill Lumbergh's picture

Observer:  How would you classify higher taxes?

Harry:  Government wealth creation.


Dr. Porkchop's picture

Does this mean I'm going to be paying more for my shitty socks and underwear from Walmart?

oogs66's picture

Nah, they will just make them smaller and thinner but charge you the same :) it works on food for the sheeple so why not clothes? Maybe they will charge by size - the only real hope Americans would fight obesity.

LostWages's picture

Unless you are prone to shartz, go commando.

desgust's picture

And the next bubble is....

FunkyMonkeyBoy's picture

Why is the Bernank not hanging from a lamp post?

What does he have to do, tread on your grannies face in front of your eyes for the docile masses to take action?

SheepDog-One's picture

Makes you seriously ponder WTF does a guy have to do in this country to get swingin from a rope! Demoralized States of Amerika, ah I hardly knew ye.

Cheesy Bastard's picture

Makes you seriously ponder WTF does a guy have to do in this country to get swingin from a rope

A little more, today, for a cotton rope I guess.

SilverIsKing's picture

When you pay people to say nice things about you and the bought and paid for media run with it, the masses believe the bullshit.