Cotton Futures Rally Gains Ground Amid Market Adjustments

Cotton futures are displaying bullish momentum Wednesday, with prices climbing 39 to 48 points across the contract spectrum. This recovery follows a bearish session on Tuesday, when the market retreated 72 to 84 points across front-month contracts as the close approached.

Market Dynamics Driving Cotton Price Movements

The primary headwind stemmed from the energy sector, as crude oil futures slid $1.65 per barrel to settle at $55.17. Concurrently, the US dollar index edged higher by $0.038, closing at $97.995, which historically creates additional pressure on commodity prices denominated in dollars.

Physical market activity from Monday’s Seam online auction revealed solid trading, with 15,641 bales changing hands at an average of 59.57 cents per pound. The Cotlook A Index declined 10 points to 73.85 cents as of December 15, signaling ongoing softness in the global spot market.

Inventory and Pricing Pressures

ICE certified cotton stocks experienced a drawdown of 1,497 bales on December 15, leaving the certified inventory level at 12,474 bales. The Adjusted World Price reflected weakness, updating to 50.39 cents per pound last Thursday—a decline of 89 points compared to the previous week’s reading.

Contract-Specific Performance

Across the major contract months, the cotton price action shows a consistent pattern:

• March 2026 Contract: Settled at 63.1 cents, down 84 points on the session, currently trading 48 points higher
• May 2026 Contract: Closed at 64.26 cents, down 80 points previously, now up 45 points
• July 2026 Contract: Finished at 65.38 cents, down 72 points, currently posting 39-point gains

The gradual backwardation in the contract curve reflects typical seasonal storage and financing considerations in the cotton complex.