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Daily Adventures In 'Limit Up' Zimbabwefication: Cotton Explodes As Asian Mills Panic
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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I'm new here.....does the "flag as junk" button actually work, or is it just for show ?
ahahaaaaaaaaaaa
Reprise the bears:
http://www.youtube.com/watch?v=fbMq1WWUXc8
Now wait a cotton pickin minute!
Hemp bitches!
Now wait a cotton pickin minute!
Hemp bitches!
ZH,
did you see sugar spike? more pressure on middle east/Egypt. Saudi Arabia will have to keeps food subsides in place for ever via higher oil price; it's going to be clockwork once the speculators start to hedge further on the oil price.
lot of cotton seed
ends up as cow chow ..
cow herds at lowest numbers in years ..
The only thing driving up commodity prices worldwide are speculators armed with cheap money provided by central bankers and super fast computers. This is causing a havoc in the lives of rest of the population and pushing them towards poverty as they can no longer afford the basic necessities of life.
Regulators are either hand in glove with the banksters or are too slow to react and take ages to identify and take measures to solve the problems.
Total ban on speculation and the reinforcement of Glass Steagall Act is strictly required to bring relief to the man on the street.
http://www.marketoracle.co.uk/Article24581.html
"The only thing"? Not so! Global demand and weather are also playing significant roles. That said, it is a SIGNIFICANT thing, yes!
But trying to ban speculation is just hacking at branches! The root of the problem is the Fed's new POLICY of inflation! If we simply ban speculative market participation, history shows that all attempts at price controls shrinks not only the liquidity pool, but producers also will cut PRODUCTION! The greatest incentive for farmers to increase production and therefore supply is when they see high prices! Thus, the supply also contracts when we try to control market prices by controlling market participation!
If mere market speculation were the proximate cause, then non-exchange traded commodities would have prices much LOWER than the futures-traded ones. The recent commodity bubbles showed exactly the opposite. Non-exchange traded commodities have risen even FASTER than the futures-traded ones.
The reason for this is that in smaller markets with less liqudity, those markets can be MORE EASILY manipulated by blue whale investors. The antidote to these elitist few like Soros manipulating the market is to INCREASE the liquidity pool, NOT by central bank money printing, but by broadening the market participation. The Hunt Bros. tried to manipulate the silver market, and succeeded as long as the size of the market remained small. But once the market grew to an unmanageable size, in which even housewives were selling their silver in pawn shops, the Hunts lost control and the market collapsed. Prices plummeted!
If all you do is go after those dirty speculators, supplies will contract and prices will go even HIGHER still!
They key to resolving this problem isn't to hack at the speculative branches, but to cut off the ugly Fed roots! We MUST end the tyranny of the Fed and its inflationary stranglehold! That done, the speculative branches will die off on their own and prices will come back to earth!
http://www.hedgeye.com/media_assets/0007/5398/_chart_of_the_day_large.jpg
At least everyone who can't afford to wear clothes will be thinner and look better naked because they can't afford to eat as much. Let's just hope soap doesn't skyrocket too.
Washington D.C. is an affront for Tel Aviv.
Israel will prove to be the most oppressive and murderous country
and people ever on this earth. Enough is never enough.
Modus Operandi -
First they try to kill your spirit and identity. If that doesn't work
they just kill you. And they kill with impunity over and over again.
The Fed and government can only get away with their CPI fraud as long as Americans are willing to buy the lie. So far, many still do. But I think more are awakening to the realization of the fraud than Bernanke and his politicos think. Unfortunately, with food and other commodity shortages beginning to surface, they may be too late -- as always! Inflation is not only here, it is only getting started in the U.S. and other developed markets. It's going to get UGLY by summer -- just in time for QE3,000,000,000,000!