Cotton Futures Retreat Amid Mixed Market Signals in Tuesday Session

Cotton futures retreated during Tuesday’s trading, with contracts finishing nearly unchanged—hovering within just 5 points of the flat line. Meanwhile, crude oil prices dipped 13 cents per barrel, settling at $57.95, while the US dollar index appreciated by $0.188 to reach $97.920, reflecting broader currency strength.

Market Indicators Show Modest Upside Momentum

The Cotlook A Index gained 50 points on Monday morning quotes, advancing to 74.50 cents—a signal of underlying strength in global cotton valuations. The Adjusted World Price received its update to 50.02 cents/lb on Monday morning after a holiday-related delay, inching up just 3 points compared to the previous week. Meanwhile, auction activity demonstrated consistent interest, with The Seam’s online auction recording 23,018 bales sold on December 29 at an average price of 59.79 cents/lb.

Inventory Levels Remain Stable

ICE certified cotton stocks maintained equilibrium on 12/29, holding steady at 11,600 bales. This stable inventory level suggests balanced supply dynamics in the market, neither indicating shortages nor oversupply pressures that could dramatically shift trading sentiment.

Contract-by-Contract Breakdown

The performance across cotton futures contracts painted a nuanced picture:

• Mar 26 Cotton closed at 64.32, declining 3 points
• May 26 Cotton closed at 65.64, gaining 1 point
• Jul 26 Cotton closed at 66.85, advancing 1 point

The mixed results across different maturity months reflect trader uncertainty about near-term versus medium-term cotton supply and demand prospects. While the distant contracts edged higher, the near-month contract faced selling pressure, a typical pattern when market participants reassess fundamentals heading into a new year.