Cotton followed through higher today after the limit up move on Tuesday following the announcement from India. Stocks are tight and upside resistance was broken so that we were able to settle at 2-year highs. However, looking at the N'10 reaching almost 87 cents intraday, we are only a few cents from setting 15-year highs! 1995 was the last time cotton settled above 100 c/lb. and it certainly looks like we could be heading that way.

China remains the most important key to the puzzle, but we do have almost a 10 cent invert on the board. Mills will certainly do everything they can to slow down consumption in order to bridge the gap to the cheaper 3rd and 4th quarter back months. Northern Hem new crop production will also be crucial during this period of tight U.S stocks and lack of exports from India. Even the 1 million bales of cert stock cannot put a lid on this market due to the tightness of nearby stocks.