Cotton futures found new contract lows this week as a lack of bullish news for the market led to continued chart weakness. 

December cotton traded as low as 64.16 cents a pound on Wednesday, taking out the “Liberation Day” low of 64.24 cents. Prices did rally off those lows, but follow-through buying on Thursday has been lackluster. 

Export sales have not been reported for a second week due to the government shutdown. It would be interesting to see if the lower prices are drumming up more export sales from key buyers. 

Money managers are likely holding a record net short position following the recent washout, or they are close to it. That increases the likelihood of a short-covering rally, but the buying could be limited if the fundamentals don’t support higher prices. 

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