Cotton continues to find support from Chinese buying after another day of higher local prices. Along with the new import quotas, there are also rumors of problems with the new crop which is keeping the markets supported. Cotton tested the top of the range last night and uncovered some buy stops but continues to struggle above 84 cents. Volume remains above average as cotton is finding good scale down support.

Stocks are so tight that even with the higher acreage estimates in new crop, there is no room for any mistakes and yarn prices remain at non-traditionally high levels. These prices tend to lag and its hard to say how much longer they will last. Outside
markets are mixed as the Euro bounced off 4-year lows today and the USD pulled back. Expect more sideways trading as we approach FND next month.