Oil and Cotton increased

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At the beginning of the week oil prices slipped below the psychological level of USD 50 supported by a stronger USD and market expectation that the FED will raise rates soon. Last week oil rose by 2 percent mainly because of wildfires in Canada and productions drop in Nigeria. Oil Investors are looking forward to OPEC’S half year meeting, which will be held in Vienna on upcoming Thursday. OPEC will discusses inter alia the possibility of an output freeze which may support oil prices. Although Iraq is considering to lower the production Saudi Arabia and Iran expressed strong concerns against lowering their production. Therefore it is likely that the OPEC will not agree on productions cuts.

Gold price dropped to a 3 ½ month low at USD 1,200 per Ounce, a USD 100 drop since the 15 month high reached at the beginning of May. Investors avoid investing in gold since FED’s chair Janet Yellen conceive a rates raise in the next two months. Especially speculative investors have sold their gold position, according to Commerzbank’s commodity analysts.

Cotton soared by 5 percent last week reaching USD 0.65 per pound slightly below the 4 ½ month high of April. According to the Cotton Association of India, the upcoming harvest should yield 10.8 percent less than last Year. Moreover, the forecast from the US Department of Agriculture regarding the cotton production may be too optimistic. The concern that the global cotton is going to exceed production in 2015-2016 came unexpected. However, prices could stabilise at USD 0.50 to 0.55 per pound in the upcoming years, according to most of the cotton experts, which met at the 33rd International Cotton Conference in Bremen end of march.