Cotton's Weekend Fade: Bears Tighten Their Grip on Prices

2025-12-26 02:22:19

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Cotton futures experienced a notable retreat as the trading week concluded, with prices slipping 15 to 30 points across different contract months. March delivery was particularly weak, finishing 78 points lower than the previous week’s close. The bearish sentiment reflected broader market dynamics, as institutional investors’ positioning added weight to selling pressure.

Market Positioning Signals Trouble Ahead

Institutional investor data painted a bearish picture for cotton. As of October 28, managed money positions revealed a net short of 74,093 contracts in cotton futures and options—a modest reduction of 7,152 contracts from the week before. This persistent short bias suggested traders expected further downside potential heading into the final months of the year.

Price Action Across Contract Months

The December 25 delivery contracts finished at 62.13 cents per pound, down 15 points on the session. March 26 Cotton retreated to 63.93 cents, also declining 15 points, while May 26 Cotton fell more sharply to 65 cents, dropping 23 points. The consistent decline across the entire futures curve underscored the uniform weakness plaguing the market.

Physical Market Dynamics and Global Benchmarks

The Adjusted World Price updated Thursday revealed 51.28 cents per pound, up 51 points week-over-week, providing some support to an otherwise soft market. However, the Cotlook A Index declined 10 points to settle at 74.70 cents, reflecting international pricing pressure. Physical supply metrics showed ICE certified cotton stocks decreased by 4,309 bales to 15,585 bales total as of December 4. Meanwhile, The Seam’s online auction on 12/4 moved 5,171 bales at an average of 58.37 cents per pound.

External Market Influences

Crude oil futures climbed 47 cents per barrel to $60.14, while the US dollar index gained $0.042 to close at $98.995. These broader commodity and currency movements often interact with cotton pricing dynamics, providing context for the week’s weakness.

Market participants will be watching closely to determine whether cotton can stabilize or if further downside awaits into the new year.

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