The big sudden rebound in old crop cotton had gone six straight trading sessions until WednesdayΆs break and it got hammered Thursday. Until Wednesday, new crop futures had been reluctant to follow the rally in old crop and the July-Dec spread had approached 15 cents until finally starting to close a bit Wednesday and Thursday.

Unwinding of long July/short December spreads is surely a factor as well. If spread-unwinding is the best thing bulls can cling to for new crop, itΆs gonna prove temporary at best and I suspect another selling opportunity.

If December futures can hit 79 again, cash marketers should take sales to 45% and Futures and options users hedge another 15%, to 65% priced. I totally concur with cotton guru Dr Carl Anderson who told followers yesterday that we could be looking at a 16.5 million bale crop vs USDAΆs June WASDE call for 15.0 million bales in a year.

The only bright spot in that event is AndersonΆs observation that U.S. export potential probably exceeds USDAΆs current forecast because the gap between foreign production and foreign use is 7.7 million bales, the biggest deficit in three years.