Ｃｏｔｔｏｎ Ｐｒｉｃｅｓ Ｌｉｋｅｌｙ ｔｏ Ｔｒａｄｅ Ｉｎｖｅｒｓｅｌｙ ｔｏ Ｄｏｌｌａｒ

After briefly breaching 65 cents/Ib， the December contract fell sharplyover a few of days in mid-August before finding support near 58 cents/lb.In the weeks since， December futures have gradually drifted upwards，surpassing 61 cents/Ib in recent trading. Movement in the A Index followedthe same pattern， but was more muted， dropping from levels over 65cents to 62 cents/Ib before slowly climbing back up to levels just over63 cents/lb. With ongoing absence of strong fundamental signals， cottonprices appear to continue to take direction from outside market forces. Anapparent correlation is with equities. The link between stocks and cottonprices could be reflective of investment flows， but could also be a productof the relative value of the dollar， which has tended to trade inversely toequities - weakening when stocks rise and strengthening when stockprices fall. Such movement in the dollar， when initiated by changes inequity values， could also cause cotton prices to follow a pattern similar tothat of stock prices.