Indiana Grain Company, LLC

Posted: 08/19/09

By: tomgrisafi

Cotton may extend this month’s price decline because of slumping equities in China, the biggest user and importer of the fiber, said Dennis Gartman, an economist and the editor of the Gartman Letter.

Cotton fell today to the lowest price since July 30, after the Shanghai Stock Exchange Composite Index touched a two-month low. The index, down 15 percent this month, is a key indicator of expectations for growth in China and demand for commodities, from metals to pork to soybeans.

“From month to month, different things are on everyone’s radar screen,” Gartman told Bloomberg by telephone from Suffolk, Virginia. “Right now, everybody is watching the Chinese stock market. All other things being equal, if the Chinese stock market plunges, cotton prices will err on the side of weakness.”

Source: Bloomberg

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