Cotton Futures Post Strong Gains as Crude Oil Rallies on Geopolitical Developments

ZKProofster · 2026-01-12T17:27:03+00:00

Cotton futures rose significantly on Monday, supported by strong commodity prices and a weaker US dollar. Importantly, USDA's report showed decent export sales and stable cotton inventories. March, May, and July contracts advanced, reflecting market confidence in demand ahead of the spring planting season.

ZKProofster

2026-01-12 17:27:03

Abstract generation in progress

Cotton futures demonstrated robust upward momentum on Monday, with nearby contracts recording advances ranging from 63 to 68 points. The rally was underpinned by broader commodity strength, as crude oil futures climbed 92 cents per barrel to $58.24 following recent geopolitical events over the weekend. Meanwhile, the US dollar index retreated by $0.098 to $98.060, providing additional support for commodity-denominated assets.

Market Data Snapshot

The USDA’s latest Export Sales report revealed 133,996 RB of cotton were transacted during the week ending December 25, though shipments slowed to 140,723 RB compared to the previous week’s volume. On The Seam’s online auction platform, buyers acquired 4,796 bales on January 2, with the average settlement price standing at 57.81 cents per pound. The Cotlook A Index remained stable at 74.30 cents on Friday, reflecting steady international demand.

Technical and Fundamental Positioning

ICE certified cotton inventories held steady as of January 2, maintaining 11,510 bales on the certified roster. The Adjusted World Price was refreshed to 50.76 cents per pound last week, representing a 74-point increase from the prior period, while the loan deficiency payment (LDP) rate adjusted to 1.24 cents, signaling improved support mechanisms for producers.

Futures contract pricing reflected the day’s constructive sentiment: March 2026 cotton settled at 64.69 (up 68 points), May 2026 advanced to 66.03 (up 66 points), and July 2026 climbed to 67.35 (up 63 points). This graduated contract premium structure underscores market confidence in sustained cotton demand through the spring planting season.

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