We remain range bound in Z'10 but the big increase in activity was seen rolling forward to the H'11. The spread inverted today almost 60 points Z'10 over. See a chart of the spread history over the last 5 months on page 3 and you can see what a spike we have had recently as much as a 150 point swing in the last 2 days. It looks like some panic rolling is taking place and expect a reverse in this trend as there will be new crop cotton available to deliver in case the invert gets too wide.
Export sales were very good this week and showed the demand remains steady after the pull back we had in the Z'10. Based on the chart on page 2, we still need to ship over 350k each of the next two weeks to reach the revised USDA export number of 12.25 million bales. There is a storm in the Gulf which is heading north and should make landfall near Alabama and dump some much needed rain on the Memphis/Eastern region and avoid the vulnerable cotton in South Texas.