COMMODITY MORNING CALL: CRUDE 123.93 +0.11% COTTON 93.86 +1.77%

Brent crude futures were broadly unchanged during Asian trading as economic concerns balanced out rising tension between the West and Iran. Comments from the Chinese Premier that China had lowered its growth target for 2012 to 7.5% continued to weigh on sentiment while the prospect of the recent Greek bailout unravelling weighed on the prospect for oil demand growth. Supply concerns over military action with Iran rose as the US President and his Israeli counterpart slated all options were on the table. Tension over Iran is likely to continue to be a feature until at least the US Presidential Election in November. Market anecdote suggests an Israeli strike on Iran could easily add $10-$20 per barrel to crude prices.

Cotton futures rose by 4.5% yesterday, the exchanges one-day limit on news of an immediate Indian export ban. Cotton futures continued to climb overnight to around 94c per lb. For a review of the latest trends affecting the cotton market and an outlook over the next few months click here. Note that the forecast was published prior to yesterdays news from India.

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