Open interest in ICE cotton dropped a good volume on yesterday’s weakness. Energy and metals continued to lag as the dollar found support. Dow Jones industrial average experienced another day of triple digit loss as financial shares pulled stock market lower on the president’s proposed tougher rules on banks. New jobless claims rose unexpectedly which also had a negative effect on the equities market. Cotton, however, performed stronger than other commodities during today’s session with the front months settling more than 100 points higher. Commercial buying could be the reason as physical demand picked up on market dips and the on call report also shows some more big drops in unfixed on call sales.

Technically cotton looks weak, and as the March contract finds its support near 70.50, there may be further testing of the down side as we wait for more direction in the equity and currency markets. Demand is still under the market scale down but not as aggressive as last week. The USDA weekly export sales report is delayed until tomorrow due to the MLK holiday. Expect good number on the net sales again, but not as big as last week.