With all the talk about the super rally in Crude Oil on the back of the unrest in the Middle East, and the Silver rally on the back of rumors of physical Silver for delivery being gobbled up at a breakneck pace (zerohedge)– the moves in those markets pale in comparison to what we’ve seen in Cotton over the past weeks and year to date (and past two years for that matter).
While Crude Oil, Gold and Silver have been making the headlines – Cotton futures opened ‘limit up’ this morning, marking the seventh consecutive day Cotton has touched their limit up price. That’s like the Dow being up over 400 points at some point in seven consecutive trading days (wow). Of course, as soon as we started writing about it, prices sold off 3%…
While Crude and Silver are up an impressive 8.35% and 11.62% in the last week, and roughly 16% each for 2011, Cotton is up 22% since Feb. 25th, 49% for 2011, and over 400% since the 2009 lows. A Cotton ETF is surely not far behind.
Managed futures have not been as involved in the Cotton trade for whatever reason. Some took profits from the trend off the 09 lows long ago, others were stopped out on a retracement in November, other don’t include it in their portfolios, but some programs with longer term models (James River) are long.