Cotton loses momentum in February due to high inventories.

The cotton market started February under pressure, reversing the slight recovery trend seen in January. According to Itaú BBA's Monthly Agro report, cotton accumulated a 1,1% increase in the first month of the year in New York (USDc 64,2/lb), driven by the appreciation of oil. However, in the first weeks of February, the scenario changed: prices fell 3,7%, dropping to USDc 61,8/lb.

In Brazil, the stability seen in January gave way to occasional declines. In Barreiras (BA), the price fell by 1,5%, reaching R$ 3,29/lb. The domestic market faces the challenge of ample supply coupled with slower international demand. Cottonseed also continues to depreciate, pressured by the large volume of the 2025 harvest and direct competition with soybeans.

In Mato Grosso, the main national producer, the scenario is one of strategic reduction. Imea revised the planted area to 1,4 million hectares (an 8% decrease). Cotton production is expected to reach 2,6 million tons, a 15% drop compared to the previous cycle.

The adjustment reflects the producer's decision to reduce planting in the face of squeezed profit margins.

Global Perspective 

The USDA raised its estimate for the Chinese crop to 7,6 million tons, increasing the global ending stock to 16,4 million tons — a level above the average of the last five years. Despite the bearish bias in the short term, Itaú BBA signals a possible gradual recovery in prices in the second half of 2026, driven by expectations of cuts in global production for the 2026/27 season.