Cotton Rallies on Thursday as Energy Markets Support Upside Movement

2025-12-23 10:08:43

Cotton futures are displaying solid buying interest Thursday morning, with contracts gaining 15 to 22 points across the board. This upward momentum stands in sharp contrast to Wednesday’s session, when front-month contracts surrendered 11 points while nearby months traded lower overall.

Energy markets are providing support for the commodity complex. Crude oil futures rallied 37 cents per barrel to settle at $59.01, while the US dollar index weakened by $0.476 to $98.820. The weaker currency environment typically benefits dollar-denominated commodities like cotton, creating a favorable backdrop for price appreciation.

Market Data Points to Steady Supply

ICE certified cotton stocks remained unchanged on December 2 at 19,894 bales, indicating a relatively stable supply picture. The most recent online auction from The Seam saw 15,688 bales move at an average price of 61.31 cents/lb, providing a market clearing reference point.

The Cotlook A Index retreated 10 points on Tuesday, settling at 74.95 cents/lb as external pressures weighed on the benchmark. Meanwhile, the Adjusted World Price was recently refreshed to 50.77 cents/lb last week—a 3-point decline from the prior week—with an update scheduled for Thursday that could influence session sentiment.

Contract-by-Contract Performance

The December 2026 cotton contract closed Wednesday at 62.66 cents/lb following an 11-point drop, and is currently unchanged in Thursday’s trade. March 2026 futures closed 11 points lower at 64.46 cents/lb but have rallied 22 points so far this session, showing the strongest gains across the delivery months. May 2026 contracts finished Wednesday at 65.6 cents/lb after declining 11 points and are presently up 17 points, continuing the session’s broader recovery theme.

The combination of softer dollar conditions and supportive energy prices appears to have reversed Wednesday’s selling pressure, with traders positioning for continued gains through Thursday’s session.

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