Cotton closed the week on the 2-year highs and well over the previous 7-week trading range. N'10 has been supported over concerns in demand vs. supply after India's announcement this week. New crop is looking good at the moment but still a long way from finished so we have a potentially bullish scenario playing out over the next few months. Equity markets are firm and the commodity complex is also stable.

The COT report on page 2 showed the bounce in index and spec longs while the commercials took the short side. Cert stocks are close to 1 million bales and the delivery should show a small amount trading hands. For now, the carry between K'10 and N'10 has avoided any volatile events and we will now wait for the big question which will be the N'10/Z'10 spread which is still inverted 900 points. Expect to see more upside testing but we are due for a correction soon.