Cotton Markets Climb Wednesday Morning After Tuesday Selloff

Cotton futures experienced a notable recovery on Wednesday morning, with prices gaining 39 to 48 points across various contract months. This rebound comes after a sharp decline on Tuesday, when the market dropped 72 to 84 points throughout the front months.

What Drove the Market Pressure

Tuesday’s downturn stemmed primarily from weakness in linked commodity markets. Crude oil futures suffered a significant decline, sinking $1.65 per barrel to settle at $55.17. Meanwhile, the US dollar index appreciated by $0.038 to reach $97.995, which typically exerts downward pressure on commodity prices denominated in USD.

Current Price Levels and Weekly Performance

The March 26 cotton contract closed Tuesday at 63.1 cents, representing an 84-point loss, but has since recovered 48 points in Wednesday trading. The May 26 contract stands at 64.26 after an 80-point decline, now up 45 points. July 26 cotton closed at 65.38, down 72 points, with a current gain of 39 points as the week progresses.

Market Fundamentals Show Mixed Signals

Data from Monday’s online auction at The Seam indicated sales of 15,641 bales at an average price of 59.57 cents per pound. The Cotlook A Index declined 10 points on December 15, settling at 73.85 cents. ICE certified cotton stocks decreased by 1,497 bales on the same date, bringing the total certified inventory to 12,474 bales.

The Adjusted World Price was updated last Thursday to 50.39 cents per pound, representing an 89-point decline from the previous week, highlighting the broader pressure on global cotton valuations.

Wednesday’s Recovery: A Turning Point?

The morning bounce suggests potential stabilization after Tuesday’s broad-based selloff across commodity markets. Traders are monitoring whether this Wednesday recovery can establish support levels or if renewed weakness in energy and currency markets may resume downward pressure on cotton futures.