Cotton closed at the lows of the week and at the lowest level in 7 weeks. We are still in the middle of index and spec fund rebalancing. See page 2 as you can see the changes in the COT report from last week which were mostly unchanged. Volume was in line today and we are expecting more of the same as we wait for the USDA S&D report to come out on Tuesday. Open interest is falling slightly and cert stocks continue to grow.

We are not expecting any big changes on Tuesday, but the bullish trend is starting to come under pressure and we may see a move back to higher ending stocks next week. Some production forecasts are coming in better than expected including Pakistan. We may see a test of the 70 cent level based H'10 next week as the technicals are starting to turn bearish.