Cotton Prices at Record Levels, Supplies Lowest Since 1993

Irfan Chaudhry submits: The USDA's latest World Agricultural Supply and Demand Estimates ((WASDE)) report surprised the corn / grains markets to the upside, as estimates of yield per acre were revised downwards and estimated carried inventories were reduced. The 2010-11 average farm price projection is raised 10 cents on both ends of the trading range to $4.90-5.70/bushel, as cash and futures prices are expected to strengthen.

THE Wall Street Journal reports that some high-flying commodities have gone into retreat in recent weeks:Cotton has pulled back 17% from the all-time record set in early March, and sugar is down 34% from its multidecade high in February. Lead and zinc have tumbled in recent weeks after shooting up in the second half of 2010. Copper has shed 6% this year.

World Market Pulse submits:Cotton has been acting as a general of the commodity markets in recent times with prices running at record highs (reaching its highest price level in 15 years) amid tightening global supplies after the devastating floods in Pakistan, one of the world's largest cotton growers and continued wet weather in China.

Persistent concerns over the health of the U.S. economy and pressure on the dollar will send gold prices to a record average high this year, Thomson Reuters GFMS said on Wednesday, before the metal’s 12-year bull run tops out late in the year. Gold investment fuelled by negative real interest rates and debt concerns is seen driving prices higher in the first six months of 2013, it said, offsetting a dip in jewellery demand and a rise in mine and scrap supply.

Investment U submits: By Tony D'Altorio Cotton prices have surged beyond $2 a pound, the highest level they’ve ever hit. The fiber didn’t even go that high during the Civil War’s cotton embargo.It is now up 170% since a year ago, and more than 40% since the beginning of 2011. Short-term squeezes have definitely contributed, as mills scramble to buy futures contracts to fix physical supply prices. But there are solid fundamentals to blame as well.

From NY Fed President William Dudley: The Road to Recovery: BrooklynOn the national economy:[E]conomic growth so far this year has been disappointing. Real GDP in the first quarter of 2011 grew at a tepid 1.8 percent annual rate, and the available data suggest that growth in the current quarter will not be much better.

While Europe’s financial crisis continues India grew GDP by 8.6% in the first 3 months of 2010. China continues to grow quickly as do many emerging countries, including Brazil. India’s Q4 GDP grows at 8.6% y-o-y

Chinese food inflation was up 2.7 percent year-over-year in March, down from six percent the previous month. This decline was led by a 5.5 percent decline in pork prices. China is the world's largest pork consumer, and pork accounts for a significant chunk of the consumer basket.