Cotton Collapses

Cotton wilted to its lowest price in nearly a year this week, falling below $1 per pound for the first time since September 2010.

Drought and blistering demand from China, the world's largest consumer of cotton, were responsible for its spectacular run up to $2.27 per pound in March of this year. As cotton prices tripled last year, some clothing manufacturers and retailers raised prices, passing their increased costs onto consumers.

Since then, a series of factors have coalesced to push prices lower. India, Brazil and Australia have all increased cotton exports this year. Meanwhile, China, the world's largest cotton consumer, is reducing its buying amidst growing concern about the state of the global economy. Furthermore, some manufacturers are switching to cheaper material like linen (made from flax) or synthetics (made from petroleum).

Despite the 56 percent decline over the last four months, cotton prices remain well above the 40-year average price of 75 cents per pound. In the coming weeks, cotton growers, traders and end-users will be closely watching global demand and weather in key producing areas for direction.

Corn Concerns Drive Market Higher

Corn prices continued to be stronger all this week, climbing on worries that hot weather would hurt the crop during its crucial pollination stage. Corn for December delivery reached $6.96 per bushel on Friday morning, up 21 percent over the last two weeks. Speculators continue to mull over record Chinese imports which could, along with increased ethanol demand, drive prices to new highs.=

Gold Vaults to Record Highs

Gold prices reached new all-time highs again this week, nearing $1595 on Thursday morning, while silver shot over $39 per ounce for the first time since May. Investors continue to flock toward the precious metal as they seek refuge from budget problems in Europe and the United States. This week, gold rose $50 (+3 percent) and silver climbed $2.50 (+7 percent).