Money managers have moved net‑bullish on cotton for the first time in two years, a shift driven by soaring oil prices linked to the conflict in Iran. Higher energy costs make natural fibers comparatively cheaper, prompting traders to tilt portfolios toward the soft commodity.

The price rally in oil, sparked by geopolitical tension, has squeezed margins on synthetic fabrics that rely heavily on petroleum‑based inputs. As manufacturers confront tighter cost structures, cotton’s relative affordability gains appeal, especially among funds seeking inflation‑hedged positions. This reallocation reflects a broader search for assets that can withstand volatile commodity cycles.

Investors are now weighing cotton’s supply‑demand fundamentals against a backdrop of tighter global inventories and weather‑related risks. While the commodity has lagged behind other agricultural products, the recent sentiment swing suggests traders anticipate a sustained pricing advantage over synthetics.

The net‑bullish stance marks a notable reversal in hedge‑fund positioning, signaling that cotton could see renewed buying pressure in the months ahead. Market participants should monitor oil‑driven input costs as a key driver of cotton’s price trajectory.