Cotton Holds on for Monday Gains

Cotton futures ticked higher Monday, up 10–16 points in the front months with Mar ’26 at 63.94 (+11), May ’26 at 65.06 (+15) and Jul ’26 at 66.10 (+16), despite weak export demand and softer cash indicators: weekly export sales fell to 148,396 RB (a 3‑week low) with shipments at 120,825 RB, The Seam auction averaged 59.57¢/lb on 8,516 bales, the Cotlook A Index dropped 25 points to 73.95¢ and the USDA Adjusted World Price fell to 50.39¢/lb; ICE certified stocks held at 13,971 bales. CFTC data showed speculators increased their net short by 3,756 contracts to 61,999 as of Nov. 25, and broader market moves included crude at $56.65/bbl and the dollar index at 98.300, signaling that the recent futures uptick may be fragile absent a clearer recovery in demand or tighter supply dynamics.

Analysis

Cotton futures posted modest front-month gains at the Monday close, rising 10–16 points with Mar-26 at 63.94 (+11), May-26 at 65.06 (+15) and Jul-26 at 66.10 (+16), while crude fell $0.79 to $56.65/bbl and the U.S. dollar index eased to 98.300. The price uptick contrasts with weak fundamental data: weekly export sales slipped to 148,396 running bales (a three-week low) with shipments at 120,825 RB, and The Seam auction cleared only 8,516 bales at an average 59.57¢/lb.

Key cash and supply indicators appeared softer: the Cotlook A Index dropped 25 points to 73.95¢/lb, the USDA Adjusted World Price fell to 50.39¢/lb (down 89 points), while ICE certified stocks were steady at 13,971 bales. Positioning data show speculative funds increased net shorts by 3,756 contracts to 61,999 as of Nov. 25, signaling bearish conviction that could amplify moves if fundamentals disappoint.

The market reaction suggests a technical or short-covering bounce rather than a demand-driven recovery; absent a reversal in weekly export sales, shipments, Cotlook/AWP trends or a reduction in spec shorts, upside appears limited and vulnerable to downside on renewed bearish data. Monitor the next weekly export sales, subsequent CFTC reports and cash indices for confirmation before assuming a sustained price trend.

Key Decisions for Investors

• Reduce tactical long exposure or tighten stops on existing longs given the futures bounce amid weak export sales and larger spec net-short positioning
• Avoid initiating sizable new long positions until export sales, Cotlook A or AWP show sustained improvement or CFTC net shorts decline, consider using options protection for near-term exposure
• Watch weekly export sales/shipments, Cotlook A moves, AWP updates and the next CFTC report as primary triggers to re-assess positioning