Cotton No. 2 Futures Stall Between 76 and 82 Cents as War Headlines Clash With Rising Supply

Cotton No. 2 futures have spent the past several weeks consolidating in a range roughly bounded by 82 cents on the upside and 76 cents on the downside, following an aggressive rally toward the 90 cent area between March and May that was fueled by a historic short covering rally and the outbreak of the Iran war, and a subsequent selloff driven by profit taking, weak export sales, and improved US crop weather. Since June, buyers have gradually stepped up their bids within that range, compressing price action toward the upper edge near 82 cents even as the July WASDE report showed a slightly larger global supply picture. With the Iran conflict escalating again in July and the Strait of Hormuz seeing renewed disruptions, traders are watching whether cotton can build on its recent firmness or whether growing global stocks will cap further gains. The 82 cent level remains the pivot point for the next directional move, with technical and fundamental forces both likely to play a role in which way the market breaks.Cotton on branches by Marina Fedorova via iStock