Cotton Futures Sustain Upward Momentum Through Early Week Trading

Tuesday Session Extends Bullish Streak

Cotton futures continued their rally into Tuesday morning, with contracts posting fresh gains ranging from 40 to 64 points. The momentum builds on Monday’s strong performance, when nearby months climbed 55 to 64 points following the conclusion of holiday-shortened trading. Supporting the broader rally, crude oil advanced $1.08 per barrel to $58.34, while the US dollar index retreated by $0.113 to settle at 98.045.

USDA Trade Data Signals Continued Export Interest

Week-ending December 25 figures from the USDA reveal that 133,996 running bales of cotton changed hands, reflecting active export participation. Shipments for the same period reached 140,723 running bales, though this represents a sequential decline from the prior week’s levels.

Managed Money Reduces Short Exposure

Commitment of Traders data through last Tuesday shows that managed money accounts trimmed their net short positions by 1,368 contracts—a meaningful reduction. This adjustment brought total net short positioning to 49,078 contracts, suggesting some covering activity amid the recent price strength.

Spot Market and Index Performance

The Seam’s online cotton auction on January 2 saw 4,796 bales trade at an average of 57.81 cents per pound. Meanwhile, the Cotlook A Index held steady at 74.30 cents on Friday, providing price guidance for forward sales. ICE certified cotton stocks remained stable at 11,510 bales as of January 2, indicating steady warehouse positioning.

Supporting Economic Indicators

The Adjusted World Price reached 50.76 cents per pound last week, an increase of 74 points from the prior week. The Loan Deficiency Payment (LDP) rate is currently set at 1.24 cents, offering support to domestic producers.

Futures Contract Settlement Summary

• March 2026 Contract: Closed at 64.65, up 64 points from prior settlement
• May 2026 Contract: Ended at 65.99, up 62 points on the day
• July 2026 Contract: Settled at 67.31, up 59 points with cumulative gains of 53 points

The persistent strength across the cotton curve reflects sustained demand and lower overall inventory positions, supporting the bullish technical backdrop that has carried prices higher over the past two sessions.