Cotton Rally Continues Through Early Week Trading

Cotton has staged a remarkable rebound, climbing 39 to 48 points on Wednesday morning following Tuesday’s significant pullback. The previous session saw front-month contracts slide 72 to 84 points, driven largely by weakness in related markets—crude oil tumbled $1.65 to $55.17 per barrel, while the US dollar strengthened by $0.038 to reach $97.995.

Market Dynamics and Price Movements

The latest contract figures tell an interesting story. March 2026 Cotton closed at 63.1, down 84 points from the prior close but now bouncing back 48 points intraday. May 2026 Cotton sits at 64.26 (off 80 points earlier, currently up 45) while July 2026 closed at 65.38 (down 72 points, presently up 39 points). This recovery pattern suggests underlying support finding buyers at lower levels.

Supporting Market Data

Monday’s auction activity through The Seam processed 15,641 bales at an average of 59.57 cents per pound, indicating steady merchant activity. The Cotlook A Index declined 10 points to 73.85 cents as of December 15, reflecting broader softer sentiment. However, ICE certified stock levels showed modest tightness, with a 1,497-bale reduction bringing the total to 12,474 bales.

The Adjusted World Price was marked lower at 50.39 cents per pound following last Thursday’s update, representing an 89-point decline week-over-week. This backdrop of mixed signals—supportive inventory dynamics paired with softer global pricing—appears to be creating opportunities for tactical position adjustments.

The synthetic market connection remains the key factor to monitor, particularly how energy prices and currency movements evolve through the rest of the week.