Like most commodities Tuesday, cotton was able to post a solid rally. The December was up 0.65 while March was up 0.78.

The new-crop cotton market continues to push higher with the December contract posting a new high for this rally of 86.23. Initial technical resistance is pegged at 86.31, a price that marks the 50% retracement level of the previous downtrend from 89.56 through the recent low of 83.05.

Given the continued inverse in the December to March futures spread, reflecting a bullish commercial outlook toward supply and demand, the December contract could extend its rally to between 87.07 and 87.39.

An interesting point regarding the previously mentioned inverse in the December to March futures spread is that this price relationship continues to weaken.

So while the commercial outlook is bullish, it is not as bullish as it was a few weeks ago. This could be an early sign of concern over a slowdown in demand offsetting ideas of less production.