The week ending Friday, March 27 saw ICE cotton futures stair-step a couple of cents higher (see chart above courtesy of Barchart.com). May’26 ICE cotton settled the week at 69.46 cents per pound, while new crop Dec’26 settled at 74.02 cents, a contract high. Chinese cotton prices were flat-to-higher, while the A-Index of world cotton prices declined at first, then recovered.
Other ag futures markets followed various paths for the week ending Friday, March 27. CBOT corn futures fell early, bottomed, and partially recovered (similarly to oil futures and the U.S. dollar). CBOT soybeans trended flat-to-lower, stepped higher, and then plateaued. KC wheat futures followed a similar path to soybeans save for ending the week flat-to-higher. ICE WTI crude oil futures tumbled early on apparent expectations of a resolution in Middle East hostilities. However, continued uncertainty about that situation was associated with stabilizing and slightly up-tending oil prices. The U.S. Dollar Index also tumbled early, and then trended higher over the rest of the week ending March 27. Like oil markets, the major dollar influence appeared to be fluctuating expectations of the war in Iran. Other macro influences (i.e., GDP, inflation, and interest rate policy) remained mixed in their expectation and implication for slow economic growth.
Cotton-focused news this week included continued unspectacular U.S. export net sales through March 19. U.S. export shipments hit a marketing year high in excess of 400,000 bales. Reported demand indicators included inactive to active spot trading, very light to good demand, and light to moderate supplies, all depending on the region. The supply question is likely resolved for the 2025 crop. As of March 1, NASS forecasted ginning of 99.5% of forecasted production as being ginned. Also, as of March 26, USDA AMS counted 99.4% of forecasted U.S. production as having been classed.
Through Thursday, March 26, the daily shifts in ICE cotton open interest were mixed, i.e., decreasing then increasing. Combined with mixed-to-higher ICE futures settlements, this reflected a range of possibilities: early long liquidation, switching to short covering and finally outright new buying. Not surprisingly, the weekly snapshot as of Tuesday March 24, saw a mix of week-over-week changes: There were 11,241 fewer hedge fund longs (i.e., liquidation) which was outweighed by 14,817 fewer hedge fund shorts (covered), and only partially countered by a 1,354 shrinkage of the index fund net long positions. All combined this was a price supporting speculative repositioning.
The dynamics of ICE cotton futures may also represent a wet blanket on the market. First, the rising certified stock levels in early 2026 could have been reflecting weak commercial demand for U.S. cotton. However, the certified stock level appears to have peaked, so the demand implications are less clear. It remains true that unfixed call sales (representing potential/eventual futures buying by mills) are at an historically low level, perhaps reflecting the cautionary buying on the demand side. Having said that, unfixed call sales continue to rise in March from their prior lower levels.
For more details and data on Old Crop and New Crop fundamentals, plus other near term influences, follow these links (or the drop-down menus above) to those sub-pages.
Source: TAMU