Good business was reported overnight and that helped move the market higher over 100 pts above the almost limit down close yesterday. We managed to stay above unchanged most of the day and eventually closed higher. There is certainly some demand being found at these levels but open interest came down 5k contracts which shows some liquidation of longs mostly as opposed to new shorts. Volume today was half of yesterdays 30k contracts, as we traded in a much narrower range.

The 72.80 level represents the 50 day moving average and its holding for now, but certainly could be tested again before the week is out. New crop acres are being projected close to a 10% increase from the 25 year low in 2009 of 9 million acres. Depending on the demand and spec support during rebalancing, cotton could break the 73 cent level and look for stronger support under 70 cents. Nearby demand is the key but 73 cents must hold for another test of the highs.