Cotton Pulls Back on Thursday

Cotton futures ended modestly lower Thursday, with nearby contracts off 8–12 points (Mar ’26 64, May 65.05, Jul 66.08), pressured by a decline in the USDA Adjusted World Price to 50.39¢/lb (down 89 points) and softer export activity—week of 11/13 bookings fell to 187,648 RB and shipments were the second-lowest this marketing year at 113,219 RB. Market signals are mixed: Cotlook A climbed 25 points to 73.95¢/lb and The Seam auction sold 9,650 bales at 60.52¢/lb, while ICE-certified stocks were steady at 13,971 bales. With crude down to $57.92/bbl and the dollar easing to a 98.395 index, macro conditions offer mild support, but the weaker export metrics and lower AWP are exerting near-term downward pressure on futures.

Analysis

Cotton futures closed modestly lower Thursday, with nearby contracts down 8–12 points (Mar 2026 64, May 2026 65.05, Jul 2026 66.08). The USDA Adjusted World Price fell to 50.39¢/lb (down 89 points) while weekly export bookings for the week of 11/13 were 187,648 RB and shipments were just 113,219 RB, the second-lowest this marketing year; September exports totaled 592,176 bales (up 17.16% year-over-year but down 7.88% versus August).

Market micro signals are mixed: the Cotlook A Index rose 25 points to 73.95¢/lb and The Seam auction cleared 9,650 bales at an average of 60.52¢/lb, while ICE-certified stocks were steady at 13,971 bales. Crude oil slipped to $57.92/bbl and the U.S. dollar index eased to 98.395, providing modest macro support for commodities even as domestic export flows appear soft.

Implication-wise, the decline in AWP and weak weekly bookings/shipments are exerting near-term downward pressure on futures despite supportive Cotlook A and softer dollar/crude. The sentiment read is mildly negative with a modest market-impact score, suggesting potential for continued short-term volatility until export momentum or AWP stabilizes; investors should prioritize incoming weekly export data, auction prices, and AWP updates for trend confirmation.

Key Decisions for Investors

• Reduce or hedge near-term long exposure to cotton futures given the drop in the Adjusted World Price to 50.39¢/lb and weak weekly bookings/shipments, consider short positions or collars to protect positions
• Defer adding new long positions until confirming signals arrive — sustained improvement in weekly bookings/shipments, a rebound in AWP, or Cotlook A holding above the current 73.95¢/lb level
• Monitor The Seam auction volumes/prices, ICE certified stocks, and macro drivers (crude at $57.92 and dollar index 98.395) closely and use options to manage downside risk if maintaining exposure