The market marches on. We will not know if the absence of government reports had a direct impact on the market until reports begin anew. Likely, the impact will be minor and meaningless. Yet, who knows?
For now, we must rely on word of mouth, news, and rumors of inquiries, sales, shipments, and local activity for market fundamentals. Certainly, that is the basis of our market information anyway. Yet, we are also very accustomed to the government reports to maintain our balance and their need to enforce balance and accuracy in industry reports.
Moreso than the usual USDA reports, the most important report is the CFTC On-Call weekly report that provides the checks and balances. Certainly, the USDA weekly crop conditions report and the monthly supply demand report are also crucial in helping provide vital information to all trading participants. Too, the weekly CFTC Commitment of Traders report is also important. Those reports are missed.
However, the cotton industry grapevine is typically very efficient in providing correct information. Nevertheless, surprises do occur, but government reports tend to weed out most surprises. Too, the reports help prevent potential monopolistic type action in cotton trading. Nevertheless, at the end of the day, the market tends to always be correct. It is typically the individual trader that gets off course.
Yes, the market marches on and has performed exactly as predicted and in tune with classical technical market analysis. More importantly, one can argue that prices are taking a note from that classical analysis and are now predicting that yet uncovered fundamentals are set to lead prices higher.
In tune with last week’s blow off bottom, this past week saw new market lows in all of the 2025-26 marketing year futures contracts. Likewise — although not confirmed but should be expected in this coming week — the market will see a decline in open interest. The naysayer will argue that open interest will decline simply because it is so top heavy…and it is. Yet, the decline will also occur due to the strong hint of a turnaround in prices.
It is too early to suggest that prices are turning around. However, it is becoming clear that the bottom is in, and prices will rebound in the coming contract months. As suggested last week, the more significant turnaround will occur in the 2026-27 marketing year contract months.
Now that the December contract has reached the October lows (much earlier than prior new spot month contracts fell to their subsequent lows), this is yet another classic technical suggestion that the market found its bottom. Too, the weekly trading ended 44 points higher than the prior week’s settlement. Other signs that the December contract low has been established was its slippage this past week to a contract low of 62.71 cents, in tune with the October low (October did trade down to 61.95 but only on its last trading day when no trades occurred).
As previously commented, the dirty work is done. The cotton market can now think of higher prices and dream that the U.S. cotton industry will finally realize the seriousness of market demand and return to programs to recapture some of the lost consumer demand. The 2026 crop is set for a path of higher prices.
Give a gift of cotton today.
Dr. O.A. Cleveland is professor emeritus, Agricultural Economics at Mississippi State University.
Source: cottongrower.com