Cotton has fallen over 5% in the last 2-weeks as bearish technical indicators lead to more fund liquidation. The rising cert stocks in the midst of tight ending stocks has spooked the specs into liquidating longs and taking profits. The Z'10 open interest passed the N'10 today which was earlier than expected. It is possible the index and spec funds are concerned about the invert and want to outright reduce longs until after N'10 expiration.

Export sales were below the 4-week average and did not reflect heavy mill buying. The USD remains firm but the equity markets were not too happy with the jobs report which was positive but reflected more of an increase in temporary census workers and not a real net increase in private sector jobs. The USDA S&D will come out next Thursday and there are already some estimates for new crop above 18 million bales which is considerably higher than the current USDA estimate at 16.7 mb's. Expect more downside testing into scale down trade buying as Z'10 under 75 should have good support.