Cotton moved in a wide range today on very strong volume close to 64k contracts. On the highs today, H'10 was almost 8 cents higher than the lows on Friday! This shows the velocity in which cotton has spiked after several weeks of down sessions. If you notice the K'10 contract on page 2, you will see that the upside trend is still in place and with a taker in H'10, we should see the market well supported through expiration.

Cert stocks are still high and open interest is down 15% from the highs. We are entering the roll period where the funds are busy rolling the 50k open interest in H'10 forward especially as the board narrowed in this week. Demand is certainly slowed down at these levels and expect to see some consolidation as the expiration gets closer and we trade sideways. After H'10 gets off the board, we may see another test of the lows unless there is a dramatic change in course of the outside markets.