Introduction — Market snapshot

ICE cotton futures were largely steady, with the March 2026 contract settling at 64.57¢/lb after a mild easing of 0.08¢. The contract briefly dipped to 64.27¢/lb intraday before bargain hunters stepped in, helping the market recover from oversold levels. Inter-market support from steadier CBOT soybean prices and seasonality contributed to the cautious optimism. Traders are now focused on the upcoming US monthly WASDE report for clearer supply-demand signals.

Price action & intraday flow

• March 2026 settled at 64.57¢/lb (down 0.08¢).

• Intraday low: 64.27¢/lb — followed by recovery thanks to buying interest at lower levels.

• ICE deliverable No.2 certified stocks: 19,894 bales on Dec 1, 2025 (from 20,344 bales the previous day).

• Other contracts (this morning IST): March 64.69¢ (+0.12¢), cash 62.57¢ (-0.06¢), Dec-2025 62.77¢ (-0.06¢), May-2026 65.84¢ (+0.13¢), Jul-2026 66.87¢ (+0.16¢), Oct-2026 67.48¢ (-0.21¢).

What’s driving the market now

1. Bargain hunting / technical buying
Recent declines left the market oversold; short-covering and bargain buyers provided near-term support. However, analysts warn upside remains limited without fresh demand signals.

2. Inter-market support from grains
Stabilization in CBOT soybeans (and other ag markets like wheat and sorghum) boosted sentiment because of historical correlations across commodity markets.

3. China watch
Markets are closely watching whether China — already buying US soybeans, wheat and sorghum — will expand purchases to include cotton. A concrete pickup in Chinese cotton buying would be a major bullish catalyst.

4. Seasonal and inventory signals
Lower inventory draws and the seasonal possibility of a year-end “Christmas rally” give cotton inherent upside potential at this time of year, though such moves need confirmation from fundamentals.

5. Macro / fundamental caveats
Absent stronger demand data or unexpected macro support, short-term consolidation or mild downside toward year-end remains plausible.

Technical and short-term outlook

• Near-term: consolidation around the mid-60¢ area; range trading likely until a clear catalyst appears.

• Downside trigger: renewed macro weakness or lack of Chinese buying could push prices lower.

• Upside trigger: larger-than-expected Chinese purchases, bullish WASDE surprises, or stronger textile demand.

• Seasonality: historical patterns sometimes support year-end rallies — keep an eye on demand indicators and shipping / export data.

Conclusion

ICE cotton is currently being held up by short-term bargain hunting and cross-market support from the grain complex, but the upside remains limited until clearer demand signals emerge — most importantly broader Chinese purchases or a bullish WASDE revision. Technical buyers have defended lower levels, and seasonal patterns may offer a year-end lift, yet traders should watch WASDE, export flows, and ICE certified stocks closely for confirmation. For now, expect sideways-to-slightly-volatile trading around the mid-60¢/lb area until fundamental catalysts arrive.