Posted: Monday, April 30, 2012 1:16 PM
By SANDY SHORE
Cotton prices fell 2 percent Monday after India lifted an export ban on the fiber, which could put more supplies into the global marketplace and create more competition for U.S. growers.
The world's second-largest exporter's decision reversed a ban imposed in March. India plans to review the decision in a couple of weeks. That has raised questions about how much cotton is in India's existing stockpiles and what the expectations are for the upcoming growing season.
Penson/FCG analyst Sharon C. Johnson said she isn't sure if India has committed to keep exporting indefinitely. "We're kind of really at a loss here as what's really going on in India," she said.
Cotton for July delivery fell 1.83 cents to finish at 89.4 cents per pound. A year ago, prices were over $2 per pound because of shrinking global inventories and stronger demand.
Other commodities were mixed after discouraging economic news renewed questions about future global demand for raw materials such as copper, corn, soybeans and energy products.
The Institute of Supply Management said its Chicago business index dropped in April to the lowest in more than two years. The Commerce Department said consumer spending increased 0.3 percent in March compared with a 0.9 percent gain in February.
In Spain, the government said that the country has fallen back into a recession after its economy shrank 0.3 percent in the first quarter. Spain has the fourth-largest economy of the 17 countries that use the euro. That could make it too expensive for the European Union to help with bailout loans.
Gold for June delivery fell 60 cents to end at $1,664.20 per ounce, May silver dropped 38.8 cents to $30.959 an ounce and July platinum ended down $3.80 at $1,571.90 an ounce.
May copper rose 1.35 cents to finish at $3.8335 per pound and June palladium increased 85 cents to $682.35 an ounce.
Benchmark oil fell 6 cents to end at $104.87 per barrel on the New York Mercantile Exchange. Heating oil rose 0.27 cent to $3.8134 per gallon, gasoline futures dropped 2.18 cents to $3.1844 per gallon and natural gas increased 9.9 cents to $2.285 per gallon.
In July agricultural contracts, wheat rose 4.5 cents to finish at $6.545 per bushel, corn increased 8.75 cents to $6.3425 per bushel and soybeans ended up 12 cents at $15.055 per bushel.
Copyright 2012 The Associated Press.