Cotton Cent Prices Rally on Tuesday as Market Eyes Export Concerns

Cotton trading opened strong on Tuesday morning, with the cent-denominated prices advancing 15 to 23 points as traders reassessed position and demand dynamics. This uptick follows a relatively flat session last Friday, when front-month contracts were off 4 to 5 points despite March holding a 25-point weekly gain. The energy complex provided some support, with crude oil futures climbing 11 cents to $59.30 per barrel, while the US dollar index ticked up $0.063 to $99.195—factors that often influence agricultural commodities.

Managed Money Increases Short Exposure in Cotton Markets

According to the CFTC’s latest Commitment of Traders report, managed money traders expanded their net short position in cotton futures and options by 2,600 contracts to a total of 50,372 contracts as of mid-January. This positioning shift signals growing hedging or speculative bearish sentiment among sophisticated investors, potentially reflecting concerns over slower-than-expected demand pickup.

Export Sales Significantly Trail USDA Estimates and Historical Pace

The true challenge facing cotton markets emerges from export data. Current export commitments stand at 6.937 million running bales (RB), representing a concerning 14% decline compared to the same period last year. More troubling is the pace: these commitments represent only 60% of USDA’s full-season export projection, trailing the historical average sales pace of 79 by a wide margin. Actual shipments paint an even dimmer picture at 3.142 million RB—just 27% of USDA’s estimate and significantly lagging the customary 32% average shipping pace for this point in the season.

Cotton Auction Data and Index Movements Reflect Broader Market Uncertainty

The Seam’s January 15 online auction recorded sales at 59.12 cents per pound for 11,430 bales, providing a benchmark for physical cotton pricing. The Cotlook A Index remained unchanged on January 15 at 75.05 cents per pound, while ICE certified cotton stocks held flat on the preceding Thursday at 11,029 bales. The Adjusted World Price received an update to 51.17 cents per pound on Thursday—up 20 points from the prior week—suggesting some underlying support from global pricing dynamics.

Futures Contracts Display Divergent Momentum Across Contract Months

Looking at specific cotton cent contracts, the March 26 expiration closed at 64.66 cents, down 5 points Friday but currently ahead 20 points intraday. May 26 cotton settled at 66.23 cents (off 4 points) and is now trading up 23 points, marking the strongest morning advance among the deferred contracts. The July 26 contract finished Friday at 67.65 cents, down 4 points but up 21 points today, indicating broad-based strength across the cotton curve on Tuesday morning’s session.

The combination of short-covering by managed money, supportive energy prices, and the dollar’s relative strength may be providing temporary lift to cotton valuations, yet underlying export weakness remains a headwind that traders will need to reconcile in coming sessions.