An exchange traded note (ETN) that follows cotton futures was down 5% late Monday following a bearish forecast for one of the most explosive commodities during the recent boom.
Cotton prices will be cut in half to $1 a pound by the end of 2011, according to a Bloomberg poll of analysts and traders released Monday.
The iPath Dow Jones-UBS Cotton Subindex Total Return ETN (NYSEArca: BAL) nearly doubled in price last year and was up about 45% so far in 2011 as of Friday’s close. [Why the Fundamentals Support the Cotton ETN.]
The cotton ETN reached a high of $117.33 a share earlier this month but nearly touched $100 in Monday’s weak trading as the Bloomberg story took a toll on prices.
In related commodity products, PowerShares DB Agriculture Double Long ETN (NYSEArca: DAG), iPath Dow Jones-UBS Softs Total Return Subindex ETN (NYSEArca: JJS) and iPath Dow Jones-UBS Sugar Total Return Subindex ETN (NYSEArca: SGG) were all down at least 3%.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.