Another day of a weak USD followed by strong equity markets and rising commodity prices. Cotton drifted higher today as Z'10 almost broke 79.70 c/lb which is the highest level since Sept 29, 2008. The spec hedge report showed a 6% long compared to 3% last week so spec scale down buying is certainly the main reason the market is higher and there are technical and fundamental reasons to support that.

New crop is still looking good especially in Texas which got beneficial rains again yesterday but there is still plenty of time for problems to occur. There was a 10k decert today but still a sizeable supply with almost 800k sitting on the board. We have FND next Thursday so have to see how the final days of N'10 play out but under the current tight stock scenario the downside feels limited.