Demand has been strong as the weaker market uncovered buyers across the board. The export report was exceptional for the week ending January 28th. Total new sales were booked at 525k bales net for the current marketing year. China and Mexico are the top two leading buyers, which counted for more than half of the total volume. Shipments were also well improved from a week before to near 238k bales.
Despite the excellent export report, cotton could not escape the influence from the outside markets. The USD remained firm as most of the commodity and equity markets fell lower today. The disappointing jobless claims number worried investors and Dow Jones tumbled to a three month low and traded briefly under 10,000. The nervousness about the European debt levels sent euro to a seven month low against the dollar. The January employment report comes out tomorrow which should give more clues to the performance of the equity market. The dollar 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 near term lows.