After reaching 2-year highs this week on Monday, cotton has cooled off a bit and started trading sideways. After a 20% rally, this was expected and the fundamentals have turned very bearish. Market looks like it is waiting for more news and it will have a chance to get some on Wednesday with the USDA S&D report. Not expecting any big changes and volume has really slowed down after Monday's big spike as we only reached 10k in futures today.

The big story now is cert stocks and how high will they go. Obviously, this will play a major factor in NY prices going forward. For now, we have hit almost 620k with almost 60k awaiting review. The technical flag pattern could be setting up for a pull back next week if outside markets cooperate. The USD is firm near 80 and there is still concern in Europe as well as the U.S. Employment stayed unchanged through February so the equity markets were friendly. However, we are approaching a seasonally weak period for stocks and this could add pressure to commodities as well longer term.