Cotton closed the week like it started as prices rose over 5% in only 4 trading days! The H'10 squeeze was more volatile than usual as tight cotton stocks and concern about Chinese demand coming back next week fueled the rally. Export sales were strong again this week only down 20% from the 4 week average near 500k. Futures volume was good with 26k as we approach FND for the H'10 on Monday.

Outside markets have not been influencing cotton's rally since the USD has been firm and the equity and other commodity markets have struggled. Cotton alone rallied 15% in the last 2 weeks which points to a delivery imbalance that was confirmed after the close when 2,009 contracts were issued by one company and all stopped by another. Now that this squeeze play has expired, this market may struggle to move higher unless there is a big decert or Chinese demand returns to the market at these levels.