Cotton futures continued to push lower this week after struggling to hold onto gains last week. May cotton traded about 40 points lower on Thursday before paring some of their losses, with prices hovering around 64 cents a pound. Prices had initially carved out what appeared to be a sideways range, but a move back below 64 cents this week could set the market up for a test of their contract lows.

The market has been in a downtrend for the past two years. Declining demand for U.S. cotton has not allowed futures to break away from bearish pressure. Prices had rallied in February after hitting fresh contract lows earlier in the month, largely driven by speculative short-covering.

The latest USDA export sales report showed that net cotton sales totaled a combined 205,000 bales for the current and new marketing years. Cotton sales spiked higher a couple of weeks ago. That seems to happen every now and then, but we are still facing poor export demand as a whole. Total commitments remain 10 percent lower than the previous season.

Brazilian cotton exports continue to outpace U.S. shipments. Increased export competitiveness is expected to continue as the season progresses. The latest trade data released today showed that Brazil’s cotton exports totaled 270,000 metric tons, down 1.5 percent year-over-year. China was the largest importer of Brazilian cotton during the month. Total shipments for the marketing year are running 4.5 percent ahead of the previous season at 1.991 million metric tons.

The USDA will release its March WASDE report on Tuesday. A Bloomberg survey of analyst estimates expects the 2025/26 U.S. cotton carryout to remain virtually unchanged near 4.4 million bales.

World ending stocks are expected to be 300,000 bales lower than the February forecast at 74.8 million bales.

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