T & K Futures Predicts Decade High Cotton Futures Prices in 2008

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Record high futures prices for wheat, corn and soybeans, high oil futures prices, Asian demand and the low US Dollar may push cotton futures prices dramatically in 2008.

Record high futures prices for wheat, corn and soybeans, high oil futures prices, Asian demand and the low US Dollar may push cotton futures prices dramatically in 2008.

Recent USDA reports showed that cotton planted acreage has fallen to an 18 year low because farmers are choosing to plant corn and soybeans because of higher profits. If supplies continue to slip at the same level in 2008 as they did in 2007, they may hit the record low levels reached in the 1995/96 years when cotton futures prices went over $1 per pound. If weather problems arise and there is an increase in demand a price rationing situation may occur. Visit http://www.tkfutures.com/cotton.htm to learn more.

High oil futures prices decrease the profitability of petroleum based fibers such as nylon and rayon which increases demand for natural fiber based textiles such as cotton. This increase in from the textile industry may further deplete already low supplies of cotton which may affect cotton futures prices in 2008. Visit http://www.tkfutures.com/education.htm to learn more.

China and India's demand for cotton is roughly 50% of the world consumption. The Chinese and Indian economies are booming and this demand for US cotton may go even higher if the US Dollar remains low compared to foreign currencies. Current global supplies represent roughly a 150 day supply which is the lowest since the 1995/96 season.

The author of this article is a 14 year veteran of the cotton futures markets and the president of T & K Futures and Options Inc. Before considering cotton futures or options as an investment vehicle, one must understand that there is significant risk of loss in cotton futures and cotton options trading. Use only risk capital for high risk investments like cotton futures and options. Past performance is not indicative of future results.

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MICHAEL SMITH
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