Noncommercial trade tied to a lower US dollar index sparked a solid rally in the cotton market. The July contract was 1.65 higher, the December was up 0.94, and the March posted a gain of 0.95.

Commodities in general were able to rally Monday as the US dollar index came under increased pressure. With the dollar looking at a strengthening secondary (intermediate-term) downtrend, commodities in general could see increased noncommercial buying interest. Recent weeks has seen this group become more interested in the cotton market, as evidenced again during MondayΆs rally, despite a commercial outlook that is growing more bearish.

Commercial selling limited the rally in the cotton market Monday as indicated by the strengthening carry seen in the futures spreads. Unlike some of the other ag markets, weather doesnΆt seem to be a huge issue at this time with most traders focused on demand questions. The next round of USDA numbers are set to be released on May 10, with most thinking 2013-2014 production estimates will continued to be limited by the March 28 prospective plantings acreage number.