Cotton Faces Early Thursday Selloff as Market Sentiment Shifts

FUD_Vaccinated · 2026-01-12T17:49:15+00:00

The cotton market opened cautiously, with prices declining across major contracts due to broader commodity pressures, including weaker crude oil and a stronger US dollar. Despite some midday stabilization, traders are left uncertain about future pricing directions.

FUD_Vaccinated

2026-01-12 17:49:15

Abstract generation in progress

The cotton market opened Thursday on a cautious note, with prices experiencing notable downward pressure across all major contract months. Early session weakness saw cotton futures trading 15 to 26 points lower, though midday stabilization showed gains of 3 to 5 points as traders reassessed their positions.

Broader Commodity Pressures Weigh on Cotton

The commodity complex continued to face headwinds on Thursday. Crude oil futures retreated 76 cents per barrel to $56.40, reflecting broader energy market concerns. Meanwhile, the US dollar index strengthened to $98.335, up $0.173—a factor that typically pressures dollar-denominated commodities like cotton.

Contract-by-Contract Performance

The contract ladder showed consistent weakness across the board:

Mar 26 Cotton closed Wednesday at 64.85, down 21 points, with further declines of 26 points in early Thursday trade
May 26 Cotton settled at 66.27, down 16 points, currently trading 24 points lower
Jul 26 Cotton finished at 67.61, down 13 points, now 23 points weaker

Market Indicators and Pricing Data

The Cotlook A Index registered a 65-point gain on January 6, reaching 74.70 cents—suggesting some international pricing strength despite domestic pressure. However, ICE certified cotton stocks remained steady at 11,510 bales on 1/6, providing limited supply-side support.

Tuesday’s online auction from The Seam provided important pricing signals, with sales volume hitting 41,576 bales at 61.13 cents per pound. The Adjusted World Price moved higher last week to 50.76 cents per pound, representing a 74-point increase from the previous week, though this global strength has yet to translate into domestic contract strength.

The cotton market’s Thursday weakness reflects the broader pattern of profit-taking and mixed directional signals, leaving traders uncertain about the next meaningful price direction.

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