This week marked fresh contract lows for the cotton market as a lack of willing buyers led to further selling. December cotton traded as low as 62.71 cents a pound on Tuesday, the lowest price for the December contract since the pandemic in 2020. Prices were mostly unchanged on Thursday, holding around 63.80. Near-term resistance is around the old support level of 64.22. 

The December-March cotton futures spread strengthened considerably over the past week when December futures broke sharply lower. The latest selloff may have gotten over extended, but there has been little reason for buyers to step back in. 

The lack of export data remains a challenge for understanding the demand picture. Exports are forecast to represent nearly 88 percent of U.S. cotton demand this season, a very large percentage historically.

Sometimes, significant bull spreading can suggest better export activity. The idea of improving exports won’t be confirmed until the government shutdown ends and USDA reporting restarts. 

—

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