Cotton remains extremely bullish as we have broken all upside resistance levels. Trying to guess how high this market could go is very difficult to say. We are still involved in the H'10 delivery squeeze with almost 2,400 contracts left to liquidate. There are estimates that there will be resistance near 85 cents in K'10 but the real key is the Z'10 and we should see significant selling at 75 scale up.

Cert stocks are still growing quickly and volume has been steady. The COT report on page 2 confirms that specs are the buyers and commercials are scale up sellers with index funds staying neutral. Demand has certainly slowed down for U.S. cotton at these levels while there are rumors of Indian high grades are being priced more competitively to China for nearby shipment. Expect to see more upside testing as we try to uncover enough sellers to put a lid on this market.