COTTON -- Daily Commentary -- July 2

Cotton closed higher again on Thursday. Spot July was up 7 points at 56.80 cents amid very light volume, and the key December contract was up 44 points at 60.92 cents. We are advising futures and options users to sell an additional 20 percent of your remaining 2008 crop. This should bring both futures/options users and cash marketers only to 80 percent sold. We are holding onto the remaining 20 percent for a possibly weather rally, as the Cotton Belt is in need of rain, and forecasts are calling for only scattered showers. Futures pushed higher today despite poor economic data that was released today, which showed an increase in the unemployment rate from 9.4 to 9.5 percent. Although this had little effect on the market thanks to a strong weekly export sales report, it could weigh on prices over the next few days. The report showed total sales of 249,816 bales and shipment of 346,083 bales. This puts exports well within reach of USDA’s export forecast of 12.7 million bales, or possibly exceeding.