FX.co ★ Cotton Futures at 2-Month Lows

Cotton futures have dipped below 63 cents per pound, nearing their lowest point since last November, due to easing geopolitical tensions as traders assess the supply and demand outlook. The decline in prices was tempered somewhat by a weakened dollar. The USDA's delayed weekly export sales report revealed that 412,457 RB of cotton were sold in the week ending January 15, marking a high for the marketing year — a 21% increase from the previous week, and significantly above the prior four-week average. On the supply side, concerns have arisen over potential output disruptions due to an impending winter storm in the US. In contrast, the Cotton Association of India has adjusted its cotton crop production forecast for October-September 2025-26 upwards by 2.5%, reaching 317 lakh bales, prompted by reports of increased production in Maharashtra, Telangana, and Karnataka. Additionally, the USDA's January report pointed to stronger demand amid tighter supply conditions for the 2025/26 season.