Cotton futures rallied out of the gate on Monday and held onto the majority of their gains, as the USDA reported a more favorable supply and demand outlook. March cotton traded 50 points higher to as high as 65.25 cents a pound before closing at 64.91 cents.

Prices attempted to reverse losses from last week’s highs. Today’s trade brought futures back above resistance levels that the market tried to trade above last week. Technically, prices have yet to reverse their overall downward trend, which have been established by lower highs and lower lows through most of 2025.

The USDA released its WASDE report on Monday, which showed a less burdensome outlook for the U.S. The production estimate was lowered to 13.92 million bales, down 350,000 bales from the December report. The agency noted reduced production throughout the Delta as the reason for the decline.

With exports and domestic use unchanged, the 2025/26 carryout was lowered to 4.20 million bales, 300,000 lower than the previous forecast. The stocks-to-use ratio, which measures the relationship between supply and demand was lowered to 30.4 percent, still the highest since the 2019/20 season.

Global ending stocks were reduced by 1.5 million bales to 74.48 million due to higher consumption.

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