Cotton Futures Surge as Post-Holiday Trading Resumes

Cotton futures experienced a significant bounce-back on Monday, with nearby contracts gaining between 55 and 64 points as markets recovered from the holiday slowdown. The surge in cotton trading reflected broader commodity market movements, with crude oil futures climbing $1.08 per barrel to settle at $58.34, while the US dollar index retreated by $0.113 to $98.045.

Market Data and Export Activity

The USDA’s Export Sales report released Monday morning revealed 133,996 running bales of cotton sold during the week ending December 25. Shipment volumes declined to 140,723 running bales compared to the previous week, suggesting a softer pace of physical cotton movement.

Managed money investors made a notable adjustment to their positioning, reducing short contracts by 1,368 positions to reach a net short of 49,078 contracts, according to Commitment of Traders data as of the previous Tuesday. This repositioning indicated shifting sentiment among large traders in the cotton futures complex.

Pricing and Supply Dynamics

The Seam’s online auction recorded sales of 4,796 bales on January 2, with an average price point of 57.81 cents per pound. The Cotlook A Index held steady on Friday at 74.30 cents, reflecting stability in international cotton pricing benchmarks.

ICE-certified cotton stocks remained unchanged on January 2 at 11,510 bales. Meanwhile, the Adjusted World Price for cotton increased to 50.76 cents per pound, up 74 points from the previous week. The LDP rate now stands at 1.24 cents.

Contract Settlements

Mar 26 Cotton closed at 64.65, up 64 points on the session. May 26 Cotton finished higher by 62 points, settling at 65.99. Jul 26 Cotton advanced 59 points to close at 67.31. These gains across the front three contract months reflected broad-based strength in the cotton complex as traders reassessed fundamentals following the extended holiday period.