I asked whether cotton futures were poised to take off to the upside in a March 10, 2026, Barchart article. I concluded the cotton analysis with the following:
I view cotton as a compelling candidate for low risk and high potential reward in the current environment. The uncertainty of weather during the 2026 planting and growing seasons, rising production costs, commodity cyclicality, and the current price levels favor a recovery rally that could challenge critical technical resistance at 70 cents per pound.
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May ICE cotton futures were trading at 64.39 cents per pound on March 9. In early April, the price was above 72 cents per pound.
Cotton recovers
Nearby ICE cotton futures for May 2026 delivery have recovered from the February 6, 2026, low of 60.90 cents per pound.
The daily continuous contract chart shows that cotton futures rallied 19.8% to a high of 72.97 cents per pound on April 9, 2026.
A bottom at just over 60 cents per pound
The 60.90 cents low in February 2026 was a slightly higher low during the bearish trend in cotton futures that began in May 2022.
The monthly continuous cotton futures chart shows that cotton futures declined 61% from $1.5595 in May 2022 to a low of 60.80 cents per pound in April 2025. In early February 2026, cotton futures made a slightly higher low of 60.90 cents per pound, before recovering and rallying over the 72-cent level.
Commodity cyclicality in soft commodities- The highflyers fall and laggards rally
The soft commodities sector fell 11.02% in Q1 2026. In 2024 and 2025, Arabica coffee, cocoa, and frozen concentrated orange futures exploded to all-time highs. In Q1 2026, the three high-flying posted substantial losses, with FCOJ down 7.41%, Arabica coffee futures falling 14.43%, and cocoa futures dropping 45.59%, not only leading soft commodities lower, but also posting the most significant Q1 decline in the commodities asset class.
Meanwhile, world sugar and cotton futures had lagged behind the coffee, cocoa, and orange juice futures markets during their rally. In Q1 2026, world sugar futures rallied 3.40%, while cotton futures led the sector on the upside with an 8.92% gain.
While commodity prices can extend on both the upside and the downside, commodity cyclicality often leads to reversals. During rallies, as seen in cocoa, coffee, and FCOJ, prices rose to levels where production increased, inventories began to increase, consumption declined, and prices ran out of upside steam, and turned substantially lower. In sugar and cotton, prices likely fell to levels where production declined, inventories began to fall, and consumption increased, leading to price bottoms.
Room to run in the cotton futures market
The quarterly chart highlights that cotton futures could have additional upside potential in April 2026.
The quarterly chart shows that the next upside target for cotton futures is nearby at the Q3 2024 high of 74.55 cents per pound. Above there, the next technical resistance is the Q1 2024 high, above $1 per pound. Cotton is threatening to breakout on the upside in spring 2026, which is historically a strong season for cotton prices.
Trailing stops for long positions
I suggested that a long position in cotton futures had a “low risk and high potential reward” profile in my March 10, 2026, Barchart article on cotton futures. Cotton futures traded below 65 cents per pound on March 9, 2026.
Long positions around that level require trailing stops in the current environment. As cotton prices rise, increasing profit horizons is acceptable, but stop levels should increase commensurately to protect profits and capital. I remain bullish on cotton prices, but the higher they rise, the greater the odds of a correction.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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