Cotton traded in a narrow range on lower volume. The majority is still being done in spreads from H'10 forward as the open interest fell 15k yesterday and we are now near 35k left to liquidate. The spread managed to widen back out near 80 pts today between H/K'10 after almost inverting earlier this week. The USD was mixed and the export sales report does not come out until tomorrow so the market looks like it is happy to move sideways at these levels.

Equity markets rallied on better news from the EU, but overall the direction is uncertain as the USD remains firm against the EURO.

Demand is quiet and Chinese New Year has arrived so expect some quiet sideways trading in the short term. The U.S is experiencing severe winter weather in the Northeast including snow in Dallas. This could lead to lighter volumes tomorrow and the market is closed Monday for President's Day. Along with Carnival and Mardi Gras next week and FND for H'10 futures next Monday the 22nd, expect to see the market in spread mode for the next several sessions as we trade sideways.