Cotton Starting Friday with Gains

Cotton futures recovered modestly Friday, up 5–22 points intraday after a light Thursday pullback, supported by a 25-point jump in the Cotlook A Index to 73.95c/lb and a Seam auction average of 60.52c/lb; Mar/May/Jul 26 contracts were trading 21/18/13 points higher intraday after prior-session losses. Supply and demand signals are mixed: weekly export bookings for the week of 11/13 were 187,648 RB (down year-over-year) and shipments were the second-lowest this marketing year at 113,219 RB, even as September exports rose 17% YoY to 592,176 bales; ICE certified stocks were steady at 13,971 bales while the USDA Adjusted World Price fell to 50.39c/lb. A softer dollar and weaker crude (WTI ~$57.92) could provide price support, but weak bookings and a lower AWP point to ongoing demand uncertainty that may cap further upside.

Analysis

Cotton futures recovered intraday Friday, rising 5–22 points after light Thursday pressure when contracts closed down 8–12 points. Mar 26 closed at 64 (down 12) and was trading 21 points higher intraday, while May and July 26 contracts were trading 18 and 13 points higher respectively. Macro drivers cited in the article include crude oil down $0.54 to $57.92 and the US dollar index slipping $0.373 to 98.395, which historically can provide upside support for commodities.

Fundamental signals are mixed: weekly export bookings for the week of 11/13 were 187,648 RB (down year‑over‑year) and shipments were the second‑lowest this marketing year at 113,219 RB, while September exports totaled 592,176 bales (+17.16% YoY, −7.88% MoM). Supply indicators show ICE certified stocks steady at 13,971 bales and the USDA Adjusted World Price fell to 50.39 c/lb (down 89 points), even as the Cotlook A Index jumped 25 points to 73.95 c/lb and The Seam auction averaged 60.52 c/lb on 9,650 bales.

Market signals point to a mildly positive but volatile outlook (sentiment score 0.18, market impact 0.25): the intraday bounce may be short‑lived if export bookings and AWP deteriorate further, so near‑term direction will hinge on weekly export flows, Cotlook/Auction price movements and inventory updates.

Key Decisions for Investors

• Consider modest tactical long exposure to cotton futures or selective cotton‑linked names to capture the intraday rebound, but size positions conservatively given mixed demand data
• Monitor weekly export bookings and shipments, Cotlook A, The Seam auction prices and the USDA Adjusted World Price closely and reduce exposure if bookings and AWP continue to weaken
• Use hedges or options (protective puts or collars) if maintaining directional positions, and watch crude oil and USD moves as potential short‑term catalysts