Cotton finally broke lower today after more than 10 straight sessions higher. 80.10 was the high in K'10 yesterday and that level found quite a bit of trade selling. The chart was also showing overbought levels in the RSI which was near 90. Technically we were due for a correction but now the question is where the mill buying will return. Demand is still very light at the moment and the export sales report tomorrow should be considerably less than the 4-week avg.
The daily volume has come down also now that H'10 is almost liquidated. We had another 109 contracts issued today but it looks like the remaining 2,000 contracts are delayed as cert stocks keep rising and are close to 600k including what’s awaiting review. After an impressive rally off the lows, the squeeze has pushed the front month to test the 80 cent level again but this has uncovered new sellers.