Cotton futures traded sharply lower on Monday, breaking below key support levels. December cotton traded about 100 points lower on Monday, falling below the 66-cent support level, which has contained downward moves for the past month. Futures began running stops after trading below 65.88, which was the Aug. 8 low that established the bottom of the trading range. 

Prices fell as low as 65.25 cents a pound on Tuesday, trading at the lowest since the “Liberation Day” low on April 4. Prices reconfirmed their bearish sentiment and downtrend after posting a new lower low following the lower high posted on Sept. 16. 

Speculators hold a historically large net short position as prices push to fresh lows. Strong commercial buying and bearish fundamentals have given traders little reason to reverse course on their short positions. 

Harvest pressure will continue to play a role in the market over the next month. The USDA reported that the U.S. cotton harvest reached 16 percent last week, which compared to 19 percent the same week last year. Progress was ahead of the five-year average. 

In non-market-related news, the USDA announced $531 million in grant funding to cover agricultural losses in Georgia following the aftermath of Hurricane Helene last year. The USDA and the state of Georgia are finalizing the agreement before administering funds through the Georgia Department of Agriculture.

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