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<p>[QUOTE=&quot;justafarmer, post: 755698, member: 3926&quot;]Different and smaller market but could be some lessons here.</p><p><br /></p><p>Jan 2008 expected world demand predicted 7% to 10% above world production</p><p>Institutional traders, Speculators, hedge funds and etc enter market</p><p>Early 2008 credit markets begin tightening</p><p>Feb 2008 cotton futures rise 18%</p><p>Brokers establish 2008 production contracts with farmers</p><p>Production liens are placed on farmer’s crops</p><p>Brokers hedge production contracts with ICE futures</p><p>March 3, 2008 cotton up 15%</p><p>Next day cotton up 16%</p><p>Cotton prices spike from .84 to 1.09 per lb. In 2 days</p><p>ICE margin calls</p><p>Cotton Brokers go to their normal financing sources</p><p>Financing sources balk</p><p>Investors faced coming up with more cash hoping for a turnaround or unwinding their positions for a loss</p><p>Paul Reinhart &amp; Co. fails to meet margin – loses seat on exchange</p><p>Paul Reinhart &amp; Co. will not release farmer’s from production contracts and retain liens on crop</p><p>April 2008 cotton futures settle into .60 per lb. Range</p><p>Farmer’s afraid of being classified as unsecured creditors initiate class action claiming Paul Reinhart &amp; Co inability to perform</p><p>Farmer’s receive favorable ruling and liens are released</p><p>2008 Financial market crashes</p><p>Paul Reinhart &amp; Co files Chapter 11</p><p>Cotton trading in the .40 per lb. range[/QUOTE]</p><p><br /></p>

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