The US Commodity Futures Trading Commission (CFTC) is investigating potential market manipulation of cotton futures after prices surged and then abruptly plunged in March, two people familiar with the probe said.
Results of the investigation may be released as soon as tomorrow, said the sources, who asked not to be identified because the probe hasn’t been made public.
The Washington-based commission, which is also examining potentially improper trading in oil markets, began the cotton inquiry after seeing unusual gaps between futures and spot prices, the people said.
Cotton traded on Intercontinental Exchange Inc’s ICE Futures US unit rose to a 12-year high of US$0.9286 a pound (0.45kg) on March 5, then fell as much as 26 percent by March 20 to US$0.6902. Supplies in the US didn’t justify the increase, cotton merchants told the commission during an April hearing on the role speculators are playing in rising commodities prices.
“The market is broken, it’s out of whack, and someone has to step in and bring relief,” William Dunavant, chairman of cotton merchant Dunavant Enterprises Inc, said at the April hearing.
CFTC spokesman Dennis Holden said yesterday in an interview the commission doesn’t comment on whether it’s conducting investigations.
Intercontinental Exchange spokeswoman Kelly Loeffler said her organization also doesn’t comment on possible probes. The investigation was reported earlier in the Wall Street Journal and the New York Times.
The CFTC, which regulates markets including silver and soybeans and derivatives linked to stock indexes and bonds, is under pressure from Congress to ensure commodity markets aren’t being manipulated as the prices of gold, copper, corn and wheat rose to records, said one of the people familiar with the probe.
The Reuters-Jefferies CRB Commodity Index has jumped 37 percent in the past year, touching a record 435.53 on May 22. Oil has doubled, making it the biggest gainer. Cotton jumped 48 percent, the eighth-biggest increase of 19 commodities on the CRB. Cotton for December delivery fell US$0.0027, or 0.4 percent, to US$0.7437 a pound on Friday on ICE Futures US, formerly the New York Board of Trade.
Joseph Lieberman, chairman of the Senate Homeland Security and Government Affairs Committee, said on May 20 he is considering legislation limiting large institutional investors in commodities markets.
The legislation would be aimed at speculators and other investors who use commodities to hedge against swings in other investment instruments such as stocks and the US dollar, Lieberman, a Connecticut independent, said during a hearing.
The CFTC said in a statement on Thursday that it is investigating US oil trading to determine whether the doubling of prices in the past year is the result of manipulation or fraud.
The CFTC has been investigating the transportation, storage and trading of crude oil in the US since December, the regulator said in the statement posted on its Web site.
The CFTC said its probe, which involves ICE and the UK’s Financial Services Authority, includes oil futures contracts. Oil rose to a record US$135.09 a barrel on May 22.
The regulator, which generally keeps its inquiries confidential, didn’t say when the oil-market probe will end and didn’t name any companies being targeted. The details of the investigation were confidential, it said.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique