Another day of a weak USD and strong equity markets had cotton up early on the day but N'10 came under pressure late.
Export sales were nothing like last week but still very impressive near 300k and 250k shipments. Fundamental demand has certainly slowed down for nearby shipments as new crop inquiries are the main focus now. Volume was good as we wind down the N'10 contract.
The spread came in quite a bit today reaching close to only a 100 point invert. The charts are looking a bit toppy and without a strong stopper, N'10 could go off the board weak. However, under the tight stock scenario its hard to see much down side. However, we are starting to reach the transition period between crops and with new crop off to such a good start, it is certainly possible to see some pressure on Z'10 coming over the long term if the situation does not change.