Cotton Keeps Struggling

Although the cotton market is somewhat “technically oversold” after its thousand-point drop from the August high (9345), it still cannot muster up any sort of recovery rally. Likely, with overloaded bullish funds, plus being on the eve of harvest, the market might be sensing more downside action is likely. The increase in interest rates yesterday didn’t help the cotton industry either.

In a move that markets widely anticipated, the central bank’s Federal Open Market Committee voted 12-0 to increase its key interest rate by a quarter percentage point, or 25 basis points. The move brought the overnight funds rate to a target range of 3.75%-4%.

USDA just released new export-sales data with the following numbers: Net sales of Upland totaling 71,200 RB for 2026/2027 were down 4 percent from the previous week and 30 percent from the prior 4-week average. Increases were primarily for Vietnam (28,200 RB, including 600 RB switched from Indonesia and decreases of 1,800 RB), Guatemala (14,000 RB), Pakistan (7,500 RB), Honduras (6,500 RB, including 200 RB switched from Guatemala and decreases of 700 RB), and Thailand (4,400 RB). Net sales of 6,200 RB for 2027/2028 were primarily for Guatemala (5,600 RB). Exports of 142,100 RB were down 20 percent from the previous week and 26 percent from the prior 4-week average. The destinations were primarily to Vietnam (44,600 RB), Pakistan (24,700 RB), India (18,000 RB), Bangladesh (16,200 RB), and Mexico (9,900 RB). Net sales of Pima totaling 8,300 RB for 2026/2027 were down 17 percent from the previous week, but up 68 percent from the prior 4-week average. Increases reported for India (3,400 RB), Bangladesh (2,200 RB), Thailand (1,700 RB, including 200 RB switched from Italy), Peru (700 RB), and Pakistan (500 RB), were offset by reductions for Italy (200 RB). Exports of 4,100 RB were down 22 percent from the previous week and 36 percent from the prior 4-week average. The destinations were to India (2,900 RB), Peru (500 RB), Turkey (400 RB), Thailand (200 RB), and Colombia (100 RB).

At 3:30p.m. EST Friday, the CFTC will update its closely watched Commitments of Traders Report. Last week’s data showed managed money traders were net sellers of 7,807 contracts, which reduced their net long carry to 100,170. Their record stands at 108,788 contracts.

Crude Oil is lower again today as Saudi Arabia is making additional supplies available to Asian refiners through ship-to-ship transfers near Oman’s Sohar port. That move, in addition to the quick repairs being made to her East-West pipeline, is elping ease prices.

October Cotton Contract will enter delivery on Sept. 24. Its current open interest stands at 88 contracts.  

The close-in support for December Cotton stands at 8300  and 8260 Thursday with resistance around 8500 and 8660. This morning’s estimated volume is 24,028 contracts.

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