US Cotton Rate Strengthens as Market Momentum Builds Through Early Tuesday Session

LiquidationKing · 2026-01-16T12:35:08+00:00

The cotton market saw futures rise 40 to 64 points, buoyed by positive trends from the previous session. Crude oil's increase and a weaker dollar supported this rise, despite a slight contraction in export shipments.

LiquidationKing

2026-01-16 12:35:08

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Market Dynamics Fuel Cotton’s Upward Movement

The cotton market demonstrated resilience on Tuesday morning as futures contracts climbed 40 to 64 points, sustaining the positive trajectory established during Monday’s session when nearby contracts gained 55 to 64 points following the holiday trading lull. This sustained strength reflects broader market confidence in the commodity’s near-term direction.

Supporting this upward pressure, crude oil advanced $1.08 per barrel to $58.34, while the US dollar index retreated by $0.113 to settle at 98.045—a weaker dollar typically bolstering commodity demand internationally.

Export Activity and Supply Dynamics

USDA export metrics reveal that 133,996 running bales were transacted during the week ending December 25, with corresponding shipments totaling 140,723 running bales. The latter figure represents a contraction from the prior week’s shipment volume, suggesting a potential tightening in near-term availability.

Managed money positioning shifted notably, as traders reduced net short exposure by 1,368 contracts as of last Tuesday, bringing aggregate shorts to 49,078 contracts. This repositioning signals changing sentiment among sophisticated market participants.

Supporting Price Data

The Adjusted World Price strengthened to 50.76 cents per pound last week, marking a 74-point increase from the preceding week. The Loan Deficiency Payment (LDP) rate stands at 1.24 cents, while ICE certified cotton inventory remained stable at 11,510 bales as of January 2.

The Seam’s online auction on January 2 reported 4,796 bales clearing at an average of 57.81 cents per pound, with the Cotlook A Index holding steady at 74.30 cents.

Futures Contract Performance

March 2026 US cotton rate contracts settled at 64.65, up 64 points with current advances maintaining that 64-point level.

May 2026 cotton closed at 65.99, advancing 62 points with matching current gains.

July 2026 cotton completed the session at 67.31, up 59 points with current strength at 53 points—reflecting typical calendar spread dynamics as deferred contracts moderate slightly relative to front-month strength.

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