Cotton futures traded sharply lower on Monday after the market struggled to hold onto last week’s gains. May cotton lost as much as 100 points trading through the afternoon but closed just 81 points lower at 64.80 cents a pound. Prices found pressure at the 100-day moving average last week, continuing bearish momentum that has kept the market in a downtrend.

During the week ending Feb. 24, money managers were net buyers of 26,508 cotton futures and options contracts, according to the CFTC’s Commitment of Traders report. That brought the actual net speculator position to a net short of 48,922 contracts, the smallest net short since May 2025.

Speculative short-covering drove most of the buying during the period. However, profit-taking has been unable to transition to real buying to break the market out of its current downtrend. That downtrend has been marked by lower highs and lower lows, largely contained by the 100-day moving average.

Research firm Cotlook said global cotton consumption is expected to outpace production by 146,000 tons in the 2026/27 season. That is consistent with the USDA’s early projections from the Ag Outlook Forum, that is expecting a decline in global production with moderate demand growth.

“Consumption is projected moderately higher, in view of relatively resilient global growth forecasts and encouraging textile and garment trade data from several quarters,” Cotlook said.

The U.S. is still expected to face strong competition from Brazil and other major exporters. Still, increased demand from import-reliant countries is expected to draw down stocks.

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