The recent price spurt ran out of gas today and futures closed lower. Even more noteworthy, the rally came to a halt right where technicians would have predicted it: The long-term downtrend line in cotton on the weekly chart. ThatΆs why IΆm still recommending catch-up sales if not at recommended levels below. In fact, I recommend that cash marketers push sales another 10%, to 60% sold.

Another decent gain after strong gains Thursday and Friday. This is reminiscent of the sharp, sudden August rally. Driving forces are reports of very tight deliversable stocks against futures contracts, China issuing its new import quotas, continuation of purchases from its farmers at prices far above world levels and reports that IndiaΆs large crop is suffering quality problems due to excessive rain.

Traders (and analysts) continue to be jerked around by conflicting news regarding Chinese intentions regarding their domestic price support policy. Some sources continue to confirm plans to switch from price support via purchase for reserves to a deficiency payment approach for Chinese producers, while other reports surface that China has already begun buying domestic new crop production; ostensibly to enter reserves already equal to more than a year-an-a-halfΆs worth of Chinese usage.