Gold is grabbing the headlines setting daily record highs. Silver is setting an-even-more-torrid pace. Wheat and coffee - American breakfast table staples - are surging due to bad weather around the world.
But there's another commodity that's up big: It's surged as much as 55% in the last 12 months to reach its highest price level in 15 years. And there's plenty more to come: Global demand far outstrips supply, creating an imbalance that won't be solved anytime soon.
I'm talking about cotton, the "new" king of the commodities sector.
"We have an extremely bullish situation," Mississippi State University Prof. Emeritus O.A. Cleveland said during a recent Ag Market Network conference call. Cleveland, a noted agricultural market economist, said prices could climb another 30% or more due to the ongoing supply/demand imbalances in play worldwide.
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Investing in Cotton: The New "King" of the Commodities Sector
For three ways to profit from the continued rally in cotton, please read on...
Japan's Move To Push Down Yen Gives Its Exporters a Boost Against Global Rivals
Japan yesterday (Wednesday) intervened in the currency market for the first time since 2004 to weaken a surging yen that reached a 15-year high against the U.S. dollar - and the government intervention is expected to continue.
The Japanese yen hit 82.88 against the dollar, alarming the country's officials who are worried that the rising currency would cut into exporters' profits. The yen had risen more than 11% since mid-May.
"We can't overlook these movements that could have a negative effect on the stability of the economy," Finance Minister Yoshihiko Noda said Wednesday. "We will continue to watch developments in the market carefully and we will take bold actions including further intervention if necessary."
The Japanese yen hit 82.88 against the dollar, alarming the country's officials who are worried that the rising currency would cut into exporters' profits. The yen had risen more than 11% since mid-May.
"We can't overlook these movements that could have a negative effect on the stability of the economy," Finance Minister Yoshihiko Noda said Wednesday. "We will continue to watch developments in the market carefully and we will take bold actions including further intervention if necessary."
China-U.S. Trade Relations Plagued by Protectionism
China yesterday (Wednesday) slapped the U.S. chicken industry with the second set of tariffs in less than three months, further escalating tensions with its all-important Western trade partner.
China's commerce ministry said the new tariffs, which will impose charges of as much as 31.4% on imports of U.S. chicken, were a response to what it said were subsidies that created an unfair advantage for U.S. chicken producers.
China in February imposed a 105.4% duty on imports of U.S. poultry after a government investigation found that such products were being sold by the United States at less than the fair value. The new tariffs could altogether close off the market to U.S. poultry producers.
China and the United States have a long history of trade disputes, but these conflicts in recent years have escalated in both frequency and intensity as the two nations vie for global influence.
China's commerce ministry said the new tariffs, which will impose charges of as much as 31.4% on imports of U.S. chicken, were a response to what it said were subsidies that created an unfair advantage for U.S. chicken producers.
China in February imposed a 105.4% duty on imports of U.S. poultry after a government investigation found that such products were being sold by the United States at less than the fair value. The new tariffs could altogether close off the market to U.S. poultry producers.
China and the United States have a long history of trade disputes, but these conflicts in recent years have escalated in both frequency and intensity as the two nations vie for global influence.
Obama Gains Ground on China Trade Policies as Hu Refuses to Rule Out Floating Yuan
President Barack Obama pushed against potentially unfair trade policies on two fronts in Monday's meeting with Chinese President Hu Jintao and appeared to win a small victory when Hu didn't completely rule out letting the yuan appreciate.
After Obama urged China to move toward a "more market-oriented exchange rate," Hu told him that his country wouldn't yield to "external pressure" in deciding when to adjust the yuan, Bloomberg News reported.
Obama also expressed "his concern" about some "market- access barriers in China," Jeff Bader, senior director for Asia at the National Security Council, told reporters after the meeting, which was held in conjunction with a gathering of world leaders in Washington to discuss nuclear security.
After Obama urged China to move toward a "more market-oriented exchange rate," Hu told him that his country wouldn't yield to "external pressure" in deciding when to adjust the yuan, Bloomberg News reported.
Obama also expressed "his concern" about some "market- access barriers in China," Jeff Bader, senior director for Asia at the National Security Council, told reporters after the meeting, which was held in conjunction with a gathering of world leaders in Washington to discuss nuclear security.
Brazil Wins Eight-Year Battle Against U.S. Cotton Subsidies After Threatening Sanctions
The United States and Brazil yesterday (Tuesday) announced a trade agreement to end their long-standing dispute about U.S. cotton subsidies. The countries reached the deal one day before Brazil was to impose up to $830 million in sanctions authorized by the World Trade Organization (WTO). The United States will give $147.3 million in assistance to […]
Guilty Plea by Rio Tinto Execs Shines Light on Complexity of China's Iron Ore Market
When four Rio Tinto PLC (NYSE ADR: RTP) executives stunned observers by pleading guilty to bribery charges in a Shanghai courtroom, it brought to light the unorthodox and complicated nature of doing business in China's iron ore industry.
Unlike corrupt transactions in other resource-rich countries where customers often receive bribes or kickbacks in exchange for arranging lucrative contracts, in China just the opposite is often the case.
The Rio Tinto executives, for instance, were accused of receiving bribes in return for delivering supplies of highly-desirable iron ore - the key commodity in China's burgeoning steel-making industry.
The four executives admitted receiving $13.5 million (92.18 million yuan) between them in bribes, China's state news agency Xinhua reported, citing court documents. They could face up to 20 years in prison.
But the gist of the story revolves around China's chaotic iron-ore trading system.
Unlike corrupt transactions in other resource-rich countries where customers often receive bribes or kickbacks in exchange for arranging lucrative contracts, in China just the opposite is often the case.
The Rio Tinto executives, for instance, were accused of receiving bribes in return for delivering supplies of highly-desirable iron ore - the key commodity in China's burgeoning steel-making industry.
The four executives admitted receiving $13.5 million (92.18 million yuan) between them in bribes, China's state news agency Xinhua reported, citing court documents. They could face up to 20 years in prison.
But the gist of the story revolves around China's chaotic iron-ore trading system.
Chinese Premier Wen Rejects U.S. & European Pleas, Says Yuan to Stay Stable
China's Premier Wen Jiabao vigorously defended his country's economic policies on Sunday, rejecting calls to let the yuan appreciate, and ratcheting up trade tensions with the United States where lawmakers and economists insist his stance is hindering a global recovery.
"I don't think the renminbi is undervalued," Wen said at a press conference in Beijing, using the Chinese currency's official name. "We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency."
Which Stocks and Sectors Will Shine as Market Fear Subsides?
A lot of my commentary lately on the markets has been relatively short-term oriented. Today let's take a moment to pan back and consider the weekly perspective, which is rather benign, even positive.
From this point of view, stocks are broadly recovering from their most oversold condition since March of last year -- and the release of the energy stored up then persisted at near-full strength for three months.
To find out which stocks are positioned for profit, .
From this point of view, stocks are broadly recovering from their most oversold condition since March of last year -- and the release of the energy stored up then persisted at near-full strength for three months.
To find out which stocks are positioned for profit, .
Arctic Chill Frames Divergence in G-7 Economic Policies at Canada Meet
In between bites of seal meat and dogsled races, the financial heads of the Group of Seven (G-7) countries met near the Arctic Circle in Canada last weekend to hammer out differences in how their respective countries will approach monetary policy as the economic recovery takes hold. Windchill temperatures hovered around -40°C in Iqaluit, just […]
U.S. Escalates Trade Dispute With China
The United States launched another salvo in a trade dispute with China last week when it imposed new duties on imports of steel pipes, escalating tensions between the two powers.
The Chinese government quickly fired back, accusing the U.S. of "protectionism."
The U.S. International Trade Commission (ITC) voted unanimously on December 30 to impose duties between 10.36% and 15.78% on the pipes, which are used mostly by the oil and gas industries. Those new tariffs are designed to negate the subsidies that the U.S. government says China gives its steelmakers.
The Chinese government quickly fired back, accusing the U.S. of "protectionism."
The U.S. International Trade Commission (ITC) voted unanimously on December 30 to impose duties between 10.36% and 15.78% on the pipes, which are used mostly by the oil and gas industries. Those new tariffs are designed to negate the subsidies that the U.S. government says China gives its steelmakers.
Bernanke: Asian Consumer Spending, Cutting U.S. Deficit Are Keys to Avoiding Trade Imbalances
Asian countries need to rely less on export-led growth and encourage their consumers to spend more, while the United States needs to trim its deficit to avoid pre-recession trade imbalances, U.S. Federal Reserve Chairman Ben Bernanke said yesterday (Monday). Governments in trade surplus countries - most of which include Asian nations - must act to […]
Steel Pipe Probe Could Escalate U.S.-China Trade Feud
The U.S. Commerce Department has launched an investigation into seamless steel pipe imports from China in a move that could fuel a feud over trade relations. The Commerce Department said Wednesday that it accepted a petition filed last month asking for the probe by United States Steel Corp (NYSE: X), V&M Star LP, TMK IPSCO […]
Here's Why the U.S.-China Tire Tiff Could Lead to Great Depression II
When U.S. President Barack Obama late Friday (Sept. 11) signed an order that imposed an additional duty of 35% on tires imported from China, it set up the potential for an old-fashioned trade war. Currently, global trade is down only 20%. During normal times, worldwide commerce would recover on its own. But as most investors […]
U.S. Trade Spat with China Escalates, But is Unlikely to Cause a Significant Rift
Shortly after U.S. President Barack Obama announced hefty import duties on Chinese-made tires, China's Ministry of Commerce over the weekend said it would explore possible sanctions against U.S. automobile and chicken imports. The dispute has caused some concern over an escalation in protectionist measures between the two nations, but few analysts believe the dispute will […]
U.S. Trade Deficit Widens, but Signals a Healthier Economy
The U.S. trade deficit expanded at its fastest pace in more than ten years in July, accelerated by rising oil prices and increased demand for auto parts and industrial supplies. The gap between imports and exports rose 16% - the largest percentage increase since February 1999 - to $32 billion in July from a revised […]