Today’s buying was heavily related to the sharp escalation in the Ukrainian crisis over the weekend. With Russian troops entering Ukrainian territory in the Crimea dubbed an “act of war” by the newly installed President of the Ukraine, tensions are EXTREMELY high. See related comments on WHEAT for just how wild this wild card is!
It’s particularly noteworthy that cotton futures had a strong day in spite of a big sell-off in the DJIA. For the last several weeks, cotton futures had seemed “joined at the hip” with stock market fortunes because the DJIA was considered a barometer of potential demand for cotton.
Not today. Crude oil and gold futures soared; two key “outside markets” that always do well when there’s a “flight to safety” triggered by a geopolitical crisis or financial crisis escalating. Notice the U.S. dollar rose, which is normally a “negative” outside market for U.S. commodity prices because it makes our stuff more expensive in foreign currencies. But today, cotton futures only paid attention to gold, crude oil and coat-tailed on their status as safe harbor investments in times of geopolitical crisis.
CATCH-UP SALES STRONGLY ENCOURAGED