US Cotton Market Gains Ground Following Major India Trade Deal

token_therapist · 2026-02-15T18:14:39+00:00

A new trade agreement between the US and India, reducing tariffs and increasing purchases of American goods, is positively impacting the US cotton market. Despite mixed commodity pressures, cotton futures show signs of recovery, suggesting potential stabilization ahead.

token_therapist

2026-02-15 18:14:39

Abstract generation in progress

A significant development in international trade negotiations is sending ripples through the commodity markets, with the US cotton market responding positively to new export opportunities. Following a productive call between President Trump and India’s President Modi, the two nations agreed to reshape their trade relationship, with the US reducing tariffs on Indian goods from 25% to 18%. In return, India committed to purchasing over $500 billion of American products including energy, technology, agricultural goods, coal, and other commodities. Given that India historically ranks among the top 8 buyers of US cotton, this agreement carries substantial implications for cotton prices and export volumes.

Market Response in Cotton Futures

Cotton futures showed signs of recovery at midday trading, pulling back from early session lows with losses moderating across multiple contract months. March 2026 cotton contracts are trading at 63.02, down 15 points for the day, while May 2026 contracts sit at 64.76 with 17-point declines, and July contracts stand at 66.41 down 14 points. The broader commodity environment reflects mixed pressure, with crude oil down $3.39 per barrel to $61.82 and the US dollar index strengthening to $97.500. However, the trade agreement with India provides a potential catalyst for stabilization and longer-term support in the US cotton market.

Industry Positioning and Market Sentiment

Recent positioning data reveals managed money traders adding 13,077 contracts to their net short position, bringing total short exposure to 65,029 contracts as of late January. The Cotlook A Index declined 20 points to settle at 73.95 cents on January 30, reflecting ongoing pressure. However, ICE certified cotton stocks rose by 25,666 bales to reach 34,226 total certified bales, while the Adjusted World Price dropped 76 points week-over-week to 50.23 cents per pound. The Seam auction recorded sales at 56.571 cents per pound for 4,462 bales, indicating steady cash market activity. These metrics collectively suggest that while near-term headwinds persist, the India trade deal introduces a new bullish narrative for the US cotton market seeking to break through current resistance levels.

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