U.S. cotton futures were off to a negative start this week as the market continues to search for a bottom. March cotton traded slightly lower on Monday but still posted a new contract low at 63.80 cents a pound. Futures rebounded here on Tuesday, rising about 40 points higher after the market ran out of sellers below 64 cents.

Friday’s bearish WASDE report did the cotton market no favors after raising domestic and global supplies by more than expected. U.S. ending stocks for 2025/26 were raised to 4.3 million bales, up 700,000 bales from the September report. Global 2025/26 ending stocks were raised by 2.8 million bales to 75.9 million, the highest since the 2019/20 season.

The U.S. balance sheet has been trending toward a more burdensome supply and demand situation. The stocks-to-use ratio, which measures the relationship between supply and demand, rose to 31 percent, the highest since the 2019/20 season.

Declining exports have been the largest driver of selling pressure in the U.S. cotton market. Specifically, U.S. exports to China are down significantly due to declining demand in the country.

China’s cotton imports continued to be lackluster in October. The country’s customs agency reported weak shipments last month, with year-to-date imports still running at the slowest pace since 2016.

The USDA released its Crop Progress report for the first time since the government shutdown on Monday. The agency reported that the U.S. cotton harvest reached 71 percent as of Nov. 16. Progress was five percentage points lower than last year but just one point behind the five-year average.

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