Cotton Toes The Line — Maybe

Friday’s steep selloff has brought the cotton market to the brink of piercing its major weekly support. A trendline drawn for the planting intentions low of 2025 over to the November harvest low falls in about the 60.80-cent level. A weekly settlement under that support likely opens the technical door for even lower prices. Thus, Tuesday’s February WASDE update is all the more crucial.

Friday, the CFTC will update its Commitments of Traders report. Its last release showed managed-money funds net-sold some 6,700 contracts, increasing their overall bearish position to 71,746. Their all-time record stands at 81,000-plus net short. 

As mentioned, Tuesday at noon EST USDA will issue its February supply-demand update. The average trade guess for the 2025-26 U.S. crop is 13.90 million bales, slightly lower than the 13.92 million seen in January. Exports are expected at around 12.17 million bales, down from January’s 12.20 million, resulting in ending stocks at 4.21 million bales, up from 4.20 million. World production is expected around 119.52 million bales versus 119.43 million, and world ending stocks are expected at 74.56 million versus 74.48 million in January.

Also, this week, the NCC is meeting and will release its 2026 acres survey on Feb. 12. Although not an official government report, nonetheless, it will be the first fundamental look at the potential for 2026.

On Wednesday, traders will see the delayed U.S. payrolls report for January. Estimates call for a non-farm payroll number between 70,000 and 80,000 jobs, with an unemployment rate of 4.4%. Some analysts are now pricing an interest rate cut during the first half of this year, rather than in the second.  

Chart support for July cotton stands at 64.50 cents and 64.00 cents, with resistance around 65.77 cents and 66.60 cents. Monday morning’s estimated volume is 33,235 contracts.

Keith Brown can be reached at commodityconsults@gmail.com or by calling (229) 890-7780.