Cotton Makes Repairs

The overnight cotton market continues to adjust and prepare for Tuesday’s February WASDE. However, most traders expect little change one way or the other.

As mentioned, today 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.  

Crude oil is in a holding pattern as traders gauge the potential for supply disruptions after the U.S. warned international ships transiting the Strait of Hormuz to stay on the Oman side of the straits. About one-fifth of the world’s oil negotiates the Strait of Hormuz between Oman and Iran. Currently, the U.S. and Iran are involved in nuclear talks.

Chart support for July cotton stands at 64.60 cents and 66.45 cents, with resistance around 66.45 and 67.70. Tuesday morning’s estimated volume is 23,765 contracts.

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