Cotton futures worked lower this week after extending gains above their recent trading range. March cotton traded about 20 points lower by midday on Thursday. Prices bounced off a minor support area of 64.45 cents a pound before recovering some losses.

Prices had attempted to trade sharply higher earlier this week, with futures topping 65.76 cents before erasing gains. U.S. market fundamentals remain bearish due to rising ending stocks.

The USDA will release its January WASDE report on Monday. A Bloomberg survey of analyst estimates expects the agency to increase the 2025/26 ending stocks forecast slightly from December. U.S. exports could be reduced further due to slow demand from key buyers.

Cottongrower.com released acreage survey results for the upcoming season. U.S. producers are expected to leave acreage mostly unchanged this spring at about 9 million acres. If realized, that would be the smallest acreage since 2015.

Winter weather conditions are setting the stage for a drier start to the spring. While strong yields kept total production relatively steady last year, persistent drought conditions could dig into production potential this upcoming season.

Brazil’s cotton exports hit a record 452,000 metric tons in December, according to Brazil’s Ministry of Development, Industry, Trade and Services. Year-to-date shipments are up 15.5 percent from the previous marketing year at 1.4 million metric tons. Brazil has been able to capture export share while U.S. exports have struggled this season.

Record production over the past few years allowed Brazil to increase exports and position itself as a global supplier. Meanwhile, U.S. exports have been losing its global share. Total exports and commitments for the current season reached 6.6 million bales, the slowest pace since the 2016/17 marketing year.

—

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