Solid noncommercial buying pushed the market higher again Tuesday. The December contract closed 1.64 higher while the March was up 1.75.

The December cotton contract extended its recent uptrend Tuesday, pushing to a daily high of 92.54 cents per pound. However, the contract was unable to hold the bulk of its early gains, falling back to close 1.64 cents higher at 91.72.

Gains were trimmed by a late round of commercial selling, as indicated by the action in the December to March futures spread (weakening inverse), leading to technical signals indicating a short-term top could be established in the market.

Fundamentally new-crop cotton remains bullish. The previously mentioned December to March spread inverse closed at 2.22 cents, just below its recent high of 2.33 cents.

But the trend in this spread is starting to move sideways, reflecting the possibility that the tighter supply and demand situation reported in MondayΆs USDA reports may already be priced into the market. If the December contract does begin to fall, initial technical price support is pegged near 89.00.