Cotton Futures Surge Past Holiday Lull with Strong Monday Session

Cotton contracts staged a notable recovery as trading resumed after the holiday slowdown. The March 26 Cotton contract finished at 64.65, notching a 64-point gain, while May 26 Cotton climbed to 65.99 after gaining up 62 points. July 26 Cotton advanced to 67.31, adding 59 points to its tally. The broader commodity complex also moved higher, with crude oil bouncing back $1.08 per barrel to reach $58.34, even as the US dollar index dipped $0.113 to $98.045.

Export Activity and Inventory Data Paint Mixed Picture

The USDA’s latest Export Sales report revealed 133,996 RB of cotton sold during the week ending 12/25, though shipments declined to 140,723 RB from the previous week’s levels. Meanwhile, ICE certified cotton stocks remained flat at 1/2 with holdings standing at 11,510 bales. The Adjusted World Price inched higher to 50.76 cents/lb—a 74-point increase from the week prior—reflecting modest underlying strength in spot valuations.

Speculative Positioning Shifts

Managed money traders reduced their bearish bets significantly, cutting 1,368 contracts from net short positions in cotton futures and options, bringing the total short interest down to 49,078 contracts as of the prior Tuesday. This defensive repositioning suggests some conviction building among larger participants. Physical market activity showed moderate momentum, with The Seam’s online auction recording 4,796 bales sold on January 2 at an average of 57.81 cents/lb. The Cotlook A Index held steady at 74.30 cents on Friday, while loan deficiency payment rates settled at 1.24 cents.

The session reflected seasonal cotton sector dynamics playing out across multiple timeframes, with near-term contracts capturing the bulk of Monday’s momentum as traders reassess positions heading into the new year.