COTTON -- Daily Commentary -- July 3

Cotton futures finished stronger Thursday, with the most active December contract closing 46 points higher at 75.75 cents. Activity was light ahead of the three-day weekend, with most of the trade centering around positioning ahead of the holiday. The market has fallen sharply this week ever since USDA’s Acreage report was released on Monday. Also bearish for prices was a forecast by the International Cotton Advisory Committee which estimated world demand in 2008/09 would drop from 26.75 million tonnes in 2007/08 to 26.60 million tonnes due to slower economies. Cotton prices are likely to remain weak through the next few trading sessions. Production problems should help boost prices back up, particularly if problems in Texas continue and the estimated 1.0 to 1.5 million acre losses become a reality.