According to the Plains Cotton Cooperative Association (PCCA), February has started off busy for the cotton market, with the crop insurance price discovery period for much of the Southwest beginning on Feb. 1.
The cotton insurance price for the southernmost portion of Texas was set at 68 cents per pound for the 2026 crop year.
March options are set to expire on Friday, with an updated USDA supply and demand report due on Feb. 10.
Looking ahead, the coming weeks will deliver a series of acreage updates and early projections that should provide the first clearer signals of what 2026 cotton plantings may look like.
March futures took a hit, with the contract finishing down 64 points and settling at 63.17 cents per pound. As traders begin rolling positions forward to May, those ended the week 55 points lower, closing at 64.93 cents per pound, as the announcement of the U.S. dollar slipping to its weakest level since early 2022.
Weakness was seen across the broader softs complex as well, with cocoa and coffee hit especially hard on Friday, underscoring the widespread volatility. Overall, technical momentum remains weak as major index funds continue to roll, and with added uncertainty from geopolitical and U.S. economic developments, the week ahead could be an active one.
Daily volume was strong last week, and open interest continued to build. Total open interest reached record levels, increasing by 24,072 contracts to 372,796, while certificated stocks increased from 15,244 bales to 25,666 bales. The Fed left rates unchanged this past week, holding the policy range at 3.50%–3.75% as officials signaled growing confidence in the economy’s resilience.
Powell acknowledged inflation remains somewhat elevated, but said risks to both employment and prices have eased, reinforcing expectations for an extended pause. Two dissenting votes in favor of a cut added a dovish undertone, though the broader message was patience. Markets took the decision in stride, with investors now looking toward mid- year for the next potential rate move.
The Export Sales Report for the week ending Jan. 22 showed marketing-year high shipments for Upland cotton and marketing-year high sales for Pima. Net Upland sales totaled 203,700 bales, while Pima sales came in at 24,800 bales. Shipments were also strong, with 257,000 bales of Upland exported during the week, along with 4,500 bales of Pima.
Despite the headline numbers, the market was not overly impressed, as export business remains inconsistent and highly dependent on what can be competitively offered. Even with marketing-year high shipments, exports will need to remain at or above this pace to meet USDA’s 12.2 million bale forecast. Sales must average roughly 195,000 bales per week, with shipments closer to 300,000 bales per week to stay on track.
One positive development over the weekend was news that garments produced in Bangladesh using U.S. cotton are expected to receive dutyfree access to the U.S. market, while Bangladesh’s reciprocal tariff rate could fall from 20% to 15%. Enrollment for the U.S. Cotton Trust Protocol will be open from January 5 to April 30. Growers who are currently enrolled will need to renew their membership to continue their involvement in the program.
New Grower Enrollment for the Better Cotton Initiative will be open from March 3 to May 30. Growers interested in joining this global sustainability program should contact PCCA (806) 7638011.