Cotton tumbles on decline in equities
Sunday, 16 August 2009
NEW YORK, Aug. 15 (Bloomberg): Cotton prices fell the most in eight weeks as drops in US consumer confidence and the equity market renewed concern that the economic recovery may be sluggish.
The Standard & Poor's 500 Index slid as much as 1.8 per cent. The Reuters/University of Michigan preliminary index of consumer sentiment unexpectedly fell in August from July. Global cotton consumption declined 10 per cent in the year that ended July 31 amid the global recession.
"Stocks are weak, and cotton is falling," said Tom Reardon, the president of Delta Brokerage in New York.
Cotton futures for December delivery tumbled 2.97 cents, or 4.6 per cent, to 61.12 cents a pound on ICE in New York, the biggest drop for a most-active contract since June 19. Earlier, the fiber slid 3 cents, the most allowed by the exchange.
Yesterday, cotton reached 65.47 cents, an 11-month high. The price has gained 25 per cent this year.
Soybean prices dropped as much as 3.9 per cent today, dragging cotton lower, Reardon said.
US farmers planted less cotton in order to grow more oilseeds and grains. The fiber was grown on 9.05 million acres this year, down from 9.47 million last year, the Department of Agriculture has said. Cotton also may be falling on improving crop conditions in the US, Reardon said.
The Standard & Poor's 500 Index slid as much as 1.8 per cent. The Reuters/University of Michigan preliminary index of consumer sentiment unexpectedly fell in August from July. Global cotton consumption declined 10 per cent in the year that ended July 31 amid the global recession.
"Stocks are weak, and cotton is falling," said Tom Reardon, the president of Delta Brokerage in New York.
Cotton futures for December delivery tumbled 2.97 cents, or 4.6 per cent, to 61.12 cents a pound on ICE in New York, the biggest drop for a most-active contract since June 19. Earlier, the fiber slid 3 cents, the most allowed by the exchange.
Yesterday, cotton reached 65.47 cents, an 11-month high. The price has gained 25 per cent this year.
Soybean prices dropped as much as 3.9 per cent today, dragging cotton lower, Reardon said.
US farmers planted less cotton in order to grow more oilseeds and grains. The fiber was grown on 9.05 million acres this year, down from 9.47 million last year, the Department of Agriculture has said. Cotton also may be falling on improving crop conditions in the US, Reardon said.