Cotton futures continued to recover on Thursday despite disappointing trade action earlier in the week. March cotton traded 30 cents higher to close at 62.29 cents a pound. Prices softened again on Friday, but are still set to end the week in the green.

Old crop cotton futures remain in a downtrend as bullish news remains scarce. Front-month futures continued to be under more pressure amid weak demand for U.S. supplies. First notice day is around the corner for the March contract. Open interest dropped sharply this week and has been climbing in the May contract.

The USDA raised its Chinese cotton production forecast to 35 million bales, up 500,000 from the previous estimate. Production is far exceeding last year’s 32 million bales. Rising production in China has broadly deterred imports, heavily impacting U.S. exports over the past couple of years. As of Feb. 5, total U.S. cotton exports and commitments are running 12 percent lower than the previous season.

Brazil’s National Supply Company (Conab) lowered its 2025/26 cotton production forecast to 3.80 million metric tons, down 15,000 from the previous estimate. Some of the intended cotton areas have been shifted to winter corn due to price weakness. Total production is expected to be 6.7 percent lower than last year’s record.

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