Arabfields, Naïla Mokhtari, Correspondent, São Paulo, Brasil — Cotton prices fell sharply in New York on Tuesday, giving back part of their recent gains as the progress of the U.S. harvest eased concerns over supply and prompted investors to reduce positions.

The December 2026 contract fell about 4.8% to close at 78.86 cents per pound. March and May 2027 contracts also dropped by roughly 4.7% and 4.6%, respectively.

The decline came after a strong period for the market. December cotton futures had traded above 91 cents per pound about a month earlier, following a rally of nearly 35%. The latest correction therefore reflects a significant pullback from recent highs, rather than necessarily signaling a complete change in the market outlook.

In the United States, the harvest is beginning to provide clearer indications of the season’s production potential. About 17% of the U.S. crop had been harvested by the end of last week, slightly ahead of the average pace. At the same time, about 70% of plants had reached the boll-opening stage.

The progress of the harvest is gradually reducing some of the uncertainty surrounding weather conditions. Concerns about the impact of weather on U.S. cotton production had helped support prices during the summer and encouraged investment funds to increase their bullish positions.

Those funds have since begun cutting their exposure. Selling pressure intensified in recent sessions as new information on the U.S. crop failed, so far, to point to losses large enough to justify the price levels reached in late August.

For cotton growers, the decline comes at a mixed moment. Lower futures prices weaken short-term revenue prospects, but the global market continues to receive support from expectations of tighter supplies and steady consumption.

September projections indicate that global cotton production for the 2026/27 season has been revised lower, while ending stocks are also expected to decline. That could limit the depth of any further correction if international demand remains resilient.

The market is also watching trade relations between the United States and China, two major players in the global cotton industry. Investors had been looking for further progress that could strengthen demand for U.S. cotton, but the lack of significant new developments has encouraged greater caution.

In the short term, prices could remain under pressure if the U.S. harvest continues to advance under favorable conditions and investment funds keep reducing their positions. The 75-cent-per-pound level is likely to attract attention as a potential area of support if the decline continues.

A stabilization is also possible if production estimates deteriorate, global demand improves or new weather concerns emerge in major producing regions.

For farmers, the recent move highlights the volatility of the cotton market after the strong gains recorded during the summer. As the U.S. harvest provides greater visibility on supply, the direction of global demand and inventories will be crucial in determining whether the current correction continues or prices regain support in the coming weeks.