The morning news. [volume] (Savannah, Ga.) 1887-1900, 1890-02-17
THE COTTON MARKET.

IN the cotton market. The price was not
PARTICULARLY low before the movement COM
Tnenced, but nevertheless during the past
six weeks an advance of about X cents per
Mound was effected, and well sustained I'D
m the present writing. This sudden rise.
Generally unexpected, except perhaps by a
few chronic bulls, might well call for some
explanation.
To understand the position as thoroughly
rs Dos sibls we have TO go back to last sum
mer. to the well remembered Liverpool
corner, where the willy ex-salt merchant &C
ouired control of the available supplies aud
numerically squeezed" such unfortunate
SINNERS and spec ulatorS as happened to be
short. use the technical expression. At
this time the brilliant prospects of our crop
already promised yield surprising all
records; American exporters freely Of
fered enormous quantities of the
new crop at generally low prices
These offers were as freely accepted, and
before the season opened it was realized that
the fultllment of these contracts would re-
0uire great deal of cotton, creating a de-
mand which would exert a powerful sus-
tanning influence on the market, no mat
ter what the crop might be. However, the
sentiment throughout the south was strongly
bearlsh. The belief was general in a very
large crop, and even those who appreciated
the Importance of the unusually urgent ex-
port demand supposed that it would be
pretty we'll satisfied by the beginning of
December, when accommodating stocks, beg
ging for purchasers, would result in lower
prices.
1t is needless to say these expectations
were not realized. Throughout the first
four months commencing Sept 1, tle de-
mand for export was 50 enormous that
although the crop movement was beyond
precedent, the residue of stocks in this
country was even smaller than in previous
years. Nothing but the large receipts saved
the export trade from disaster or ruin-evi-
IDENTIFY exporters had oversold, but the south
was still convinced the crop
was too large for 10 cents
in the New York market, and almost uni
versally expected a bad break sooner or
later. The opinion was backed by heavy
sales of futures, the short interest increas-
ing from July or August up to the end of
the year, by which time it must undoubt-
eddy have been very large So rapid was
the export movement that the stock in New
York, the most important point, remained
at very low figure. Such was the stats
Of affairs about Jan. l, 1890.
When the new year opened, the export
demand, contrary to expectations, showed
little or no signs of comparative diminu-
ton; on the other hand, the crop movement
did fall off very sharply. reducing estimates
of the total yield With tremendous
'outsiden short interest, and a very small
stock chiefly under their own control, the
bulls perceived that they had the bears at
their mercy. When we consider the fact
that the bulls were people with millions,
while the bears were the thousands of small
fry scattered over the country, it would
seem that almost anybody ought to have
foreseen the inevitable result. And yet
s., Il Il. g.
plainly to be seen then as now. The bulls
did not fail to push their advantage.
and before long they were vigorously
assisted by the bears themselves, who were
obliged to cover their sales as their margins
became exhausted, or who became con.
verified into bulls. The result has been an
enormous pressure to buy, and the effect an
advance, as stated above, of about II
cents since Jan. /.
The above seems to be fair statement of
the causes and circumstances leading to the
recent advance The main point to be no.
ticed is that the rise was not due to the
intrinsic merits of the article, but to the
anomalous speculative position. Had it not
been for the exceptionally heavy forward
selling by exporters, and the large short in
terest in futures, there can scarcely be a
doubt that prices must have declined last
fall, so thai the southern planters must
thank speculation for the many millions
additional they have realized. European
spinners are not consuming the crop at
IL cents; they supplied most of their
wants in advance last summer,
at 81 to 10 cents, and such as were not for
tunate or prudent enough to SO supply
themselves will hardly be able to keep up
with the procession. The majority that
did will no doubt make large dividends;
but somewhere or other the higher prices
for goods will result in accumulations in
the various rivulets OF trade. In this
country, where spinners did not for the
most part anticipate their wants, there
may perhaps be less used than last pear.
Public opinion about cotton has under
gone vast change during the past six
weeks. Now we frequently hear intelligent
people talk of - or 13 cents; they say we
will not have again for a long time, if ever,
the low prices Of recent years; in short,
that cotton has taken legitimate move to
a higher plane of value. This. however,
seems extravagant. A commodity, in the
face Of the largest supplies ever produced,
does not move to higher level on its in
trinsic virtues bpsuch leap, but gradually
improves year by year, to accomplish what
may be done by speculation in as many
weeks. Ours is the most prosperous coun-
try on the globe, and yet all the great agri-
cultural interests, except cotton, are In a
state of extreme depression. No advance
increased consumption.
The question of supply is a very vital
one; the supposed wants of the world hav-
ing been very much enlarged, and enlarged
upon by the bulls. Our crop, which early
in the season was thought to be not less than
100000 to 100000 bales, is now conf
IDENTIFY predicted to scarcely reach Z. loo, 0O0
or 1900, 900 at the outside. There seems no
Justification of these latter igures-it ap-
pears that the advance in the price has
caused a drop in estimates. For the first
two weeks in this month the crop has come
in sight at the rate of fully 150,00 bales per
week; a very moderate movement from
now on would make about 6, $50, 900 bales In
sight by March l, and about 100000 bales
by April l. Almost no cotton became visible
during the summer Of last year; we can,
therefore, scarcely lose anything. On the
other hand, the farmers announced last
summer the intention to hold for higher
prices, it will be recollected some of them
were to get 1919 cents, and others as high as
l4cents. Whatever may be the proportion OF
the crop still thus held back, there GER
talnly is more or less. Preparations for I'M
usually extended planting will probably
scare most of it out of the farmers during
the spring and summer, and during the five
months from April l to Sept l no human
9elng, not even Statistlcian Dodge or
memphis factor can say whether we Will re-
celve only 200,0 bales, or 100000.