The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-05-03
Tarrant a. Kings
Cotton Letter.
Per H. F. M'ELRoY
Especial to News and Observer)

Especial to News ana ODSerNefD
New York, May I've have continual
~ pointed out the extremely bullish fea-
lures in the cotton market since last No
vember. when May cotton was under 3
cents When the price advanced to above
ten cents, as We have all along felt con-
fident that it would do, conditions sur
rounding the market changed.
To begin with, the principal feature
was the small American stocks As long
as cotton remained under ten cents stocks
decreased rapidly as compared with pre-
vious years, but now that the price has
advanced to a point that checks bying
from every direction. we notice that the
figures are changing to the bear side rap
idly, for instance we would point out
that during the week. just ended stocks
at United States ports and interior towns
increased 1000 bales while during the
same week a year ago, there was a de-
crease Of $4,000 in American stocks; in
other words, there has been an increase
this week Of $4,000 bales as compared
with last year, in the available American
supplies.
Spinners and exporters refuse to follow
the advance, and as much Of the cotton
now in America is of very low grade, it
win find its way to New York for deliv-
cry on contracts, just as large quantities
Of low grade cotton does every summer
This STUFF Is not desirable for Spinning
purposes, and is used as a hammer over
the heads Of the bulls in the future mar
kets on August contracts every. year. OF
course Nay and July cotton are manipu-
lated by strong people. but they will not
attempt such tactics in August contracts.
because aIl the large failures in the last
twenty years in the cotton trade have re-
suited from an attempt to carry manipu-
lation into August. Moreover, spinners
always find way to get over the month
Of August without buying except very
spariugly, rs they naturally do not want
the low stuff and prefer waiting for the
new crop.
We feel that August contracts around
present prices can be sold with absolute
safety for very handsome profits.
AS to the new crop, the season is back
ward and the discounts on the fall and
winter options are very excessive. There
is no reason why one should sell Deem
Der cotton at $3.50 when August can be
sold at $40, and August is not any more
liable to manipulation than December.
therefore we would advise short sales in
the August option rather than in the new
crop, although good weather throughout
May and June would probably carry De
cember down to eight cents: meanwhile,
however, August would undoubtedly de-
cline a full 100 points.
Those of our friends who prefer not
taking the usual speculative risk can
therefore sell August and buy December
At the same time on one margin with prac-
tically a certainty Of making from forty
to eighty points profit, with the least pos
sible risk.
The acreage this year is probably the
largest ever planted, and trade is not
nearly so good as it was a year ago. al
though spot cotton Is one per cent per
pound higher than a year ago.
On April goth last year, cotton started
to decline and August contracts went
from $40 to SOB with but small reactions,
meanwhile December declined only about
fifty points. The same will apply to
nearly every season within the past ten
years
II you are interested in cotton, stocks
or grain, and care to let US know your
position, we viii do our best to give you
the proper advice.
TARRANT & KING.
6S Broad Street