Cotton bounced back overnight with rumors of good sales being made on the dip again yesterday. China is a buyer but cotton could not get through 74 basis H’10 and we are carving out a new trade channel between 72/74. Volume was average today as the USD remained stable and the commodity complex stayed mostly unchanged. Open interest and cert stocks remained fairly unchanged.

Export sales should be above average tomorrow with estimates between 300-500k new sales. Technically the market is still vulnerable for some testing of the downside but fundamentally demand is strong but the USD is still a factor. First quarter economic indicators are friendly so equity markets are responding favorably and the market should continue to trade sideways until we get closer to H’10 expiration.