Is cotton preparing to rise?

I am questioning whether cotton will bounce back with seasonal force approaching in the Barchart article on February 17, 2026 when I concluded with the following:

Cotton offers value at current price levels, but that doesn’t mean prices won’t drop to new lows. In April 2020, the global pandemic caused prices to reach a low of 48.35, and in late 2008, they reached 39.23 cents per pound. However, in the current environment of inflation, rising production costs and a depreciating US dollar, I believe cotton prices will remain around 60 cents per pound. Commodity cyclicality and seasonality increase the likelihood of a recovery rally in the coming weeks and months.

May ICE cotton futures for February 13, 2026 were trading at 64.13 cents per pound. While they didn’t break out at the top, prices were slightly higher in March.

After hitting a low of 60.90 cents per pound on February 6, 2026, the sustainable cotton futures contract bounced back.

The chart shows a 9% rial that February 25, 2026 cotton futures were as high as 66.38 cents per pound.

The United States Department of Agriculture released its Global Agricultural Supply and Demand Projections report on February 10, 2026 and told the cotton market:

Source: USDA

International and ending cotton inventories increased, and the USDA cut the US mill price by one cent to 60 cents per pound.

The February WASDE was issued before the start of the 2026 crop year and does not account for commodity cyclicality. With cotton trading near its lowest price in six years, producers are likely to cut production, which often leads to a reduction in inventory. Consumption leads to an increase in lower prices, creating the conditions for lower price conditions. At the same time, weather uncertainty in cotton farming areas reaches its peak at the beginning of each season.

A quarterly chart since 1959 shows that while cotton futures are under pressure, they have risen to their lowest level since Q4 2001 of 28.20 cents per pound.

Over the past two and a half decades, production costs for all agricultural commodities have risen, and cotton is no exception. While the trend through 2022 remains unchanged, the long-term trend since the turn of this century suggests that higher prices and rising production costs may lead to a recovery. At 64 cents per pound, cotton prices may have limited downside risk and significant upside potential.

The ten-year monthly chart of sustainable cotton futures suggests that cotton fiber futures may be near or lower for the 2026 crop year.

Technical support is the April 2025 low of 60.80 cents per pound. Cotton futures fell from that level to just 60.90 cents in February 2026. Additionally, cotton futures fell from a high, closing at 65.60 cents per pound in February. Technical resistance is the April 2025 high of 69.75 cents per pound. Any weather disruptions that move cotton above 70 cents per pound will end the technical bearish pattern from the May 2022 high of $1.5595 a pound.

Unfortunately, there are no ETFs that track ICE cotton futures, leaving futures as the only trading option. Each ICE cotton futures contract has 50,000 pounds. At 64.40 cents, the contract is worth $32,200. ICE’s current gross margin is $1,254 per contract. A market participant can control the ICE cotton contract with a down payment of 3.9%. If the equity is below $1,140, ​​the exchange requires maintenance margin.

I see cotton as a compelling candidate for low risk and high potential reward in the current environment. Weather uncertainty during the 2026 planting and growing seasons, rising production costs, commodity cyclicality, and current price levels are fueling a recovery rally that could challenge critical technical resistance at 70 cents per pound.

As of the date of publication, Andrew Hatch held no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com