After alternating directions each of the first four sessions, cotton finally put together back to back positive sessions to end the week. Thursdays rally seemed to come from a combination of noticeable pick up in demand, a very decent export sales report, sizable de-certs of deliverable supplies and very strong outside markets.
In fact, the CRB had it biggest one day gain in almost nine months as it soared to new 15 month highs. Active spreading and rolling involving the spot December contract kept the Dec/March differences widening out. That spread has widened by 140 points since the end of September - from 315 points to 455.
Despite back to back winning days, the move towards full carry was dramatic as the board prepares for FND and the upcoming "Goldman (and others) rolls". Spot December lost 77 points for the week while March was only 17 lower for the period. All other months of cotton were higher on the week.
In other news through the week, the Cotton Condition Index hits new high for the season with a 95.7 reading well above last seasons 86.4 reading for this week in the season. Last weeks spec/hedge report showed the spec community to be net long the equivalent of 26.1 percent. However, this represented a new all-time speculative long position of 135,981 contracts.
The unfixed call position continues to be extremely lop-sided with potential buying to fix prices currently running about 6 to 1 over potential selling to fix. That takes into account cotton that has bee bought or sold but unfixed through December 2010.
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