Cotton futures continued to hug the bottom end of their trading range this week after falling sharply last Monday. 

December cotton traded moderately higher Tuesday morning at around 66.40 cents a pound. The level has served as a key support level since early March. Breaking below it makes prices vulnerable to testing the April 4 “Liberation Day” low of 64 cents. 

Cotton prices are undoubtedly cheap. Price discovery has yet to occur before the market decides to move higher, which has left fund traders adding to short positions. 

U.S. export sales improved last week, totaling a marketing-year high of 245,000 bales. Sales have improved over the past month, but poor sales ahead of the new marketing year have left total commitments well below the five-year average. 

Farmers have begun harvesting cotton in Texas, with 19 percent of the state’s harvest completed. Incoming supplies to the market could continue to limit price gains over the next couple of months. 

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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.