US Cotton Market Closes Week with Downward Pressure Amid Shifting Trade Dynamics

The US cotton market concluded Friday’s trading with a softer tone, reflecting broad weakness across the complex. Front-month cotton contracts declined steadily through the week, with March contracts down 85 points from the prior week’s close. This weakness emerged despite robust activity in the export market and ongoing production developments.

Price Action and Broader Commodity Context

Cotton futures contracts ended Friday’s session between unchanged and 7 points lower across the front months. The broader commodity landscape showed mixed signals, with crude oil rallying $1.95 per barrel to $61.31, while the US dollar index retreated to $97.305. This divergence in commodities reflected competing market narratives around global economic demand and energy markets.

Strong Export Sales Propel Cotton Higher on Year

The US cotton market received support from exceptional export activity, with USDA data revealing 412,457 running bales sold during the week ending January 15—marking a marketing year high. Vietnam emerged as the dominant buyer, accounting for 220,700 running bales, while Bangladesh imported 38,600 running bales. Export shipments totaled 187,776 running bales for the period, also representing a marketing year benchmark, with Vietnam receiving 62,300 running bales and Pakistan accounting for 45,900 running bales.

Managed Money Increases Short Positioning

Commitment of Traders data showed managed money participants adding 1,580 contracts to net short positions in cotton futures and options as of Tuesday, bringing the cumulative net short position to 51,952 contracts. This repositioning reflected trader expectations regarding future price direction in the US cotton market.

Ginning Progress and Market Valuations Adjust

NASS cotton ginning data showed 732,950 running bales processed between January 1-15, raising the marketing year total to 12.695 million running bales. The Seam’s online auction reported Thursday sales at 62.43 cents per pound on 16,726 bales. Meanwhile, the Cotlook A Index remained stable at 74.55 cents on January 22, while ICE certified stocks held steady at 10,422 bales. The Adjusted World Price declined 18 points week-over-week to 50.99 cents per pound.

Futures Close Slightly Lower Across the Board

March 2026 cotton contracts finished at 63.81, down 7 points on the day, while May contracts closed at 65.48, down 1 point. July contracts ended unchanged at 66.97, suggesting the market may be finding some equilibrium at current price levels after the week’s decline.