Cotton Futures Recover as Front-Month Contracts Gain Up to 86 Points

Cotton prices rebounded during Tuesday’s session, reversing part of the previous day’s decline and registering solid gains across the most actively traded contracts. Market data showed advances ranging from 71 to 86 points, supported by stronger energy prices and a weaker U.S. dollar.

Front-Month Contracts Close Higher

On the Intercontinental Exchange (ICE), March 2026 cotton settled at 63.83 cents per pound, up 86 points on the day. May 2026 finished at 65.45 cents, an increase of 77 points, while July 2026 ended at 67.01 cents, up 71 points.

The upward movement followed Monday’s decline and brought cotton back toward last week’s trading range. Market participants attributed part of the strength to outside influences, including a rally in crude oil and continued pressure on the U.S. dollar index.

Energy and Currency Markets Provide Support

March West Texas Intermediate crude oil futures climbed $1.96 to $62.56 per barrel, extending the commodity’s month-to-date advance. Higher energy prices can reduce the competitiveness of synthetic fibers, offering indirect support to natural fibers such as cotton.

Meanwhile, the U.S. dollar index fell 1.282 points to 95.575, its second consecutive decline. A weaker dollar often makes U.S. agricultural exports more attractive in foreign markets by lowering the effective cost for international buyers.

Wholesale Activity and Global Benchmarks

In the physical market, The Seam’s online auction reported sales of 12,326 bales on Monday at an average price of 59.58 cents per pound. Activity at the platform provides a near-term indication of demand from domestic mills and exporters.

Globally, the Cotlook A Index—a barometer of international spot values—held steady at 74.05 cents per pound on January 23. Stability in the index suggests that overseas prices remain firm even as U.S. futures experience intraday fluctuations.

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Certified Stocks Continue to Decline

ICE certified cotton stocks fell by another 1,317 bales on January 26, bringing the total to 8,595 bales. Certified stocks serve as deliverable supply against futures contracts, and a shrinking inventory can tighten the market balance if mill demand persists.

In addition, the U.S. Department of Agriculture’s Adjusted World Price was updated last week to 50.99 cents per pound, 18 points lower than the prior week. The weekly adjustment influences loan deficiency payments and marketing loan gains for producers, potentially affecting the pace at which growers market remaining supplies.

Context Ahead of Upcoming Reports

Traders now shift attention to end-of-month export sales data and the February World Agricultural Supply and Demand Estimates, both of which could refine views on U.S. shipment pace and global production estimates. Recent figures have shown steady demand from traditional destinations, while uncertainties regarding Southern Hemisphere crops continue to shape price expectations.

Market observers also monitor planting intentions for the 2026/27 season. Although new-crop contracts were not the focus of Tuesday’s rally, energy prices, currency movements, and input cost dynamics could influence acreage decisions in the coming months.

Crédito da imagem: Mykola Kolya Korzh via Unsplash