Cotton bounced higher for the second straight day on good volume. Demand has been strong as we are also approaching H'10 expiration and seeing last minute pre-Chinese New year buying. The sales report tomorrow should be strong again as 4 month lows hit earlier this week have uncovered buyers across the board. Open interest has risen as well on oversold signals, but cert stocks continue to rise.

The USD remains firm as most of the commodity and equity markets fell lower today, This is still the key to long term direction and for now we are still trending higher in the USD so expect after options expire on Friday, we may see another test of the lows. The NCC should have a bearish 10/11 acreage estimate announcement on Friday and there will be a USDA report next Tuesday. For now expect to be range bound between 69/70 until next week.