STATE OF BUSINESS: Commodities Going Down

The price of cotton plummeted on the Cotton Exchange last week, dropping $4.00 a bale in one day. Reason: the U.S. Department of Agriculture had just predicted a 14,413,000-bale crop this year, or 524,000 bales above the estimate a month ago. Cotton, which had been selling at 45¢ a pound less than two years ago, when it was short, was down to about 37½¢, five cents above the support level.

Many another commodity has taken the down elevator with cotton. A year ago, hide prices were almost twice those today. Rubber, which at the top of its post-Korea bounce sold for 80¢ a pound, was down to 27¢. Lead was 4¢ a pound cheaper than a year ago, and zinc 6¢ less. The BLS index of all commodities, which had jumped a maximum of 16% after Korea, had lost nearly five percent of the gain and, with the near-record 1952 farm crops coming in, many commodities were expected to fall still more. Since retail prices rise & fall with commodity prices, the drop in commodity prices should mean some lower retail prices in the future.