We continue to consolidate in this sideways trading range between 73/75, but the H'11 continues to slide as the spread fell below 30 pts today and could possibly invert very soon. This should continue to take place as cert stocks fall to the lowest level in 5 years at just above 87k bales. See the chart on page 2 and you will see an 8 year overlay of cert stocks compared to NY. Volume was average again today as total open interest has fallen to 157k and the specs do not seem interested in owning cotton.

Demand remains steady for new crop cotton for 4th quarter shipment. However, the crops are in great shape and have added to the bearish momentum recently. We have scale down on call sales fixations under 73 and lower with good on call purchase fixations scale up at 75 and higher. Expect to see the range of 70/75 in Z'10 unless we see some big changes in the estimates for new crop production or consumption.