WASDE-480-17                    March 2010

U. S. Cotton Supply and Use 1/

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:         :         :      2009/10  Projections

Item               : 2007/08 : 2008/09 :===============================

:         :   Est.  :    February           March

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:               Million acres

Area                       :

Planted                  :  10.83       9.47          9.15            9.15

Harvested                :  10.49       7.57          7.69            7.69

:

:                   Pounds

Yield per harvested        :

acre                   :    879        813           774             774

:

:             Million 480 pound bales

:

Beginning stocks 2/        :   9.48      10.04          6.34            6.34

Production                 :  19.21      12.82         12.40           12.40

Imports                    :   0.01       0.00          0.01            0.01

Supply, total            :  28.70      22.86         18.74           18.74

Domestic use               :   4.59       3.59          3.40            3.50

Exports                    :  13.65      13.28         12.00           12.00

Use, total               :  18.24      16.86         15.40           15.50

Unaccounted 3/             :   0.41      -0.34          0.04            0.04

Ending stocks              :  10.04       6.34          3.30            3.20

:

Avg. farm price 4/         :   59.3       47.8     59.0-65.0       60.5-65.5

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Note: Reliability calculations at end of report.

1/ Upland and extra-long staple; marketing year beginning August 1.  Totals may

not add due to rounding.  2/ Based on Bureau of Census data.  3/ Reflects the

difference between the previous season’s supply less total use and ending

stocks based on Bureau of Census data.  4/ Cents per pound for upland cotton.

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Wednesday we’ll receive the latest USDA crop report and it is likely to show a further reduction in the crop. The cold weather did cause damage and this report ought to verify some of that damage. There should be more possible, so lean towards the long side….

Interest rates will be going higher!  Just think about it, as states and countries find themselves in budget deficit, they will have to pay more to borrow money because of the slippage in their ratings.  This leads to higher interest rates all around as people value risk more carefully.  The thought being that if the states and countries have to be bailed out…..oh we forgot, refinanced, that cost will be borne by the larger entity, here in the states, it is the government, in Europe it is member of the European Central Bank.  We have seen wealthy countries bail out their poorer, more leveraged relatives, case point Dubai.
 
Here in the states we, the home owners, find that our real-estate taxes are increasing.  House values continue to retreat and yet, we must pay more in real-estate taxes.  Why, because we are paying for those neighboring homes that have gone into foreclosure.  Crime is on an up-tick.  Even on safe streets, we have an increase in break-ins and robberies as the desperate become more desperate and brazen.  What is to be done?  The world is becoming a less friendly place to work in and to live in. 
 
People today, who are employed, continue to have trouble making their bills.  The tax increase felt by the increase in real-estate taxes along with high utility bills and other increases are causing the steady earner to fall behind.    Credit card companies, instead of understanding that some money is better that no money on a bill, are recklessly raising the rate that they charge on their cards.  One of our cards  is charging almost 26%!  Naturally, we will be closing that account permanently. You would think the financial wizards that run the credit card companies would understand that higher rates on already stressed balances will likely lead to default which will lead to additional write-downs on their financial statements.  Why not reduce interest rates on the cards so that the balance can be paid.  It seems like moronic behavior, wonder why people are getting into credit card trouble, look at the way those companies are run.  So where is the spending going to come from?  Certainly apparel is cheap enough and electronics seem to be cheap as well, but with the current flock of cost increases just to live, who can afford a new outfit or another gadget that you really don’t need?  
 
What impact will all this have on inflation? I suspect once rates move up, so too will inflation, which should be supportive for commodity values. However, the transition will apt drive prices lower as we move from low to higher rates and that may take a while.

Am I misreading this! This is so very wrong!

I find it curious that while President Obama is adamantly against off shore drilling for our own country the good old USA, he signed an executive order to loan 2 Billion of our taxpayers dollars to a Brazilian Oil Exploration Company (which is the 8th largest company in the entire world) to drill for oil off the coast of Brazil! The oil that will come from this operation is for the sole purpose and use of  China and NOT THE  USA!
 
Now here’s the real clincher…the Chinese government is under contract to purchase all the oil that this oil field will produce, which is hundreds of millions of barrels of oil.The US gains absolutely nothing from this transaction whatsoever! Wait, it gets more interesting. Guess who does?
 
The largest individual stockholder of this Brazilian Oil Company that’s who, do you know who that is? Why BILLIONAIRE, George Soros, that’s who! 
 
Gee, wasn’t he one of President Obama’s most generous financial supporter during his campaign? I’m shocked!
 
How come this isn’t front page news?In every paper in America?
 
Below is the Wall Street Journal article to confirm this.
 
http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html

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It’s no coincidence that Barack Obama has made the decision to forge an all out effort at directing attention to paint our financial institutions as “the source of all that is evil” in the United States. Obama has lost healthcare by losing Massachusetts and it is becoming increasingly obvious that his administration desperately needs something else to make them pertinent .. and they need it quick. So attacking the “evil doers” is ideal. This is all about getting the people back on his side and since most Americans aren’t particularly fond of banks or credit card companies, they seem an appropriate, if not ideal, scape goat. “Banks are easy targets for a demagogue.”

Is Obama ready to die on this? He foolishly (in my opinion) now has Democrats scrambling for a new issue and focus and this one should serve to provide Democrats a position to make them look like the good guys, (you know fighting for the little man). At the same time it forces the foolish Republicans to take the opposite side and try to defend Wall Street. Combine this with The recent Supreme Court ruling regarding political “Free Speech” and the role of corporate money and ….well, it sets the tone for another round of “wealth envy,” and likely the true motive to play in the coming November elections. But is it worth the fight? What things bad could happen?

The era of push button markets has me on the defensive as my income is derived from executing option trades for customers. Computers do not provide all of the safe guards of using an experienced professional. Additionally, the desire for funds to receive one price, (so its easier to allocate), is troublesome for me as one price becomes more important than a better price on a partial. That concept is foriegn and doesn’t sit well with me. Sorry, but it makes me sad. I always try to fill orders at the best possible price and some size orders in our smaller markets cannot always accomodate the large volume demanded…… 

Looking forward to assisting, Jurgens

they never move in straight lines. They overshoot in one direction and then overshoot on the way back. Best of all, just at the moment when they are most stretched in one direction…..that’s when “investors” feel the strongest desire to join the crowd.

Yes, some enjoy receiving faster fills, or cancelation confirmations, but if you have a good floor broker and open communication you should also receive the benefit of better fills on occassion. electronic fills don’t work an order, filling it better than your bid as frequently.

I recently received instructions to buy a straddle at a limit price and managed to fill the first portion far better. When reporting the partcial fill to the customer, (a fund), they said they were violated and should have been filled on the whole order at their limit. I insisted I was not finished filling the order, and that I was simply reporting the portion that I filled at the much better level, yet the customer wanted they entire fill since the price traded was below their bid……They even said that had they placed the order electronically they would have been filled……I tried to explain that I was filling the order signifcantly better, but they didn’t care. Seems they were more interested in convenience rather than the better price……Welcome to the world of electronic trading….

I don’t know if you caught it, but Congress passed their annual raises. This is scheduled to be accomplished without receiving attentio grabing headlines, so they do it in the middle of the night as we head into a weekend. Wouldn’t it be sweet to vote iyourself a pay increase? 

Congress avoids public awareness of their pay increases so they can prevent receiving the anger of the voters. They know that the public has been angered over the pay packages that many of those businesses receiving TARP are paying their upper management, but why is nobody angry about the pay increase for Congress.? Probably because its done during the cover of darkness……

BTW, If there is no inflation in the system, as stated by the government, (re. COLA and Social Security this year), why is the Congress getting a raise?  Shouldn’t they be set to the same standards that they are trying to set for others?  

While we are at that, why aren’t our dear elected officials paid for their performance?  The country is in deficit, therefore they should certainly not get a raise. Perhaps they should pay for the right to be in Congress.

Many traders in the financial community are paid a fixed salary, and then paid a bonus  based upon their performance.  Our elected officials have run our country into the ground and nobody is squawking about it. 

Well, I say, “Throw the bums out!” 

The fox is watching the hen house; which is a formula for disaster.  We, the citizens of the USA, are suffering like serfs. Our elected officials treat themselves as if they are a ruling class! It is time for a change,.

I would welcome a change that would have our elected officials live as we do, on social security and retirement, they shouldn’t have a seperate plan. Congressional representatives should be compelled to live with the same health insurance system that they’re trying to force upon us. If we do that, then Congress will fix the system.  We are just perpetuating bad behavior by not forcing Congress to live as we have to live.

And that’s my rant, now back to football….Jurgens

The dollar moves up, commodities go down. The dollar weakens, commodity prices move up. This inverse relationship is obvious as items priced in dollars become more attractive when the dollar softens. But it is concerning when the relationship dictates price movement to the degree that it seems to these days.

Remember when the dollar was strong? Some commodities still managed to rally back then, because they did it on their own merits. Can markets focus upon their own fundamentals, or are they subject to following the flow of investor money as it chases the dollar?