The worst-performing commodity of 2011 will resume that poor performance next year due to reduced consumption of cotton and a record-size crop of the soft fiber, according to Bloomberg.
Worldwide inventory of cotton is likely to be the largest since 2005 while the price of cotton futures is likely to continue losing value. The U.S. Department of Agriculture projects demand should fall to its lowest rate in three years at 114.27 million bales while harvests will advance 7.5 percent to 123.89 million 480-pound bales for the 12-month period completing in July. Cotton futures' record price of $2.197 per pound was established on March 7.
"It's a double whammy," James Dailey with TEAM Financial Management in Pennsylvania told Bloomberg. "Cotton is facing the worst-case nightmare for a commodity, where you have a glut in physical production combined with weakening demand."
At 1:35 p.m. on Thursday, cotton futures gained 0.23 percent, a 0.21 cent drop to 91.12 cents per pound.
Agrimoney reports sowing of cotton in China is likely to reduce next year, which also is projected to be more tepid throughout the world.
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