Cotton Plows New Ground

The cotton market posted new highs for its current move Monday as traders are squaring positions for Tuesday’s Planting Intentions Report, as well as reflecting the persistent hot and dry conditions. Overnight, new crop traded back to levels not seen since June 2024. Moreover, there may be some end-of-the-month adjustments being made.

Last Friday, the CFTC issued its Commitments of Traders report. The report revealed managed-money funds bought-in some 6,757 positions, reducing their cumulative net-short carry to 33,448 contracts. For context, their record peak position was 81,000-plus contracts from last October.     

Tuesday at noon EDT, USDA will issue its all-important 2026 Prospective Plantings report. For that report, average trade expectations are 9.229 million acres, with a range of 9.000 million to 9.635 million. This compares to 9.283 million in 2025, the 9.400 million in February Outlook Forum, and 8.99 million for the National Cotton Council’s membership’s survey.

The National Climate Prediction Center continues to see expanding drought conditions across western U.S. and for parts of the U.S. Plains. Likely June through August, an El Nino event is forecasted (62%) and could last into 2027. That event might bring wetter conditions across the U.S. Cotton Belt, but hot and dry conditions across swaths of the U.S. Midwest. Currently, the Center shows 91% of the U.S. Cotton Belt is suffering drought conditions, up from last week’s reading of 90%.

The U.S. dollar is nearing a 10-month high Monday, as mixed signals from Iran and the United States dimmed hopes of a possible quick end to the Middle East conflict. President Trump said Iran’s new leaders have been very reasonable of late. However, U.S. troops continue to arrive in the region. Many global markets have been greatly ⁠rattled after the conflict effectively closed the Strait of Hormuz, but the U.S. is determined to have it fully open soon.

All U.S. markets will be closed this Friday for the Good Friday/Easter holiday.

Chart support for July cotton stands at 71.85 cents and 70.60 cents, with resistance around 73.25 cents and 74.00 cents. Monday morning’s estimated volume is 31,731 contracts.

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