Cotton Holding onto Monday Gains

Cotton futures ticked modestly higher midday (Mar ’26 63.99¢/lb, May 65.08¢, Jul 66.10¢; +15–17 points) despite a softer fundamental backdrop: U.S. export sales for the week to Nov. 20 were a three‑week low at 148,396 RB with shipments 120,825 RB, the Adjusted World Price fell to 50.39¢/lb (down 89 points) and the Cotlook A Index eased to 73.95¢; The Seam auction cleared 8,516 bales at 59.57¢ and ICE certified stocks were steady at 13,971 bales. CFTC data (week to 11/18) showed spec funds trimmed 2,086 contracts from a large net short to 58,243 contracts, with another position report due this afternoon; overall the market shows limited buying support and remains vulnerable to further downside if export demand and world prices do not improve.

Analysis

Cotton futures were modestly higher midday, with Mar-26 at 63.99¢/lb, May-26 at 65.08¢ and Jul-26 at 66.10¢—gains of roughly 15–17 points—despite a softer fundamental backdrop. Crude oil traded lower at $56.69/bbl and the US dollar index was 98.320, which provide limited bullish support for the soft commodity.

U.S. export sales for the week to Nov. 20 dropped to 148,396 RB (a three-week low) while shipments rose to 120,825 RB; the Adjusted World Price fell to 50.39¢/lb (down 89 points) and the Cotlook A Index eased to 73.95¢ (down 25 points). A Seam online auction cleared 8,516 bales at an average 59.57¢/lb and ICE certified stocks were steady at 13,971 bales, signaling weak cash market demand and range-bound certified stocks.

Spec positioning shows the market remains vulnerable: the delayed CFTC report to 11/18 shows spec funds trimmed 2,086 contracts but remain net short at 58,243 contracts, and a new CFTC report for the week of 11/25 is pending. The mixed short-covering technical lift versus deteriorating fundamental indicators points to limited buying support and downside risk unless export demand or world prices recover.

Key Decisions for Investors

• Maintain modest or hedged exposure to cotton futures given weak export sales (148,396 RB) and a declining Adjusted World Price (50.39¢, down 89 points),
• Monitor the upcoming CFTC report for the week of 11/25 and weekly export sales data for evidence of further short-covering or an improvement in demand before increasing long positions,
• If holding long cotton exposure, implement downside protection (put options or collars) until Cotlook A and AWP show stabilization and ICE certified stocks begin to draw,
• Avoid initiating larger directional positions pre-report; consider relative-value trades across nearby contracts (Mar–Jul spreads) to express lower-conviction views