Fundamental analysis involves comparing major supply and demand variables like production, consumption, and ending stocks.  This is usually based on organized tables, the prime example of which are published by USDA, and reproduced below:

Updated World cotton supply/demand.  USDA’s month-over-month world adjustments in the February WASDE report were neutral modestly price weakening.  Supply side adjustments included no month over month changes in beginning stocks.  World production was adjusted 430,000 bales higher in February, compared to January), which was mostly in China (+500,000), and offset by Mexico (-10,000 bales). World imports in February were a mere 50,000 bales lower compared to the previous month, as gains in India (+200,000) and China (+200,000) were offset by cuts in Pakistan (-200,000), Turkey (-100,000), Indonesia (-50,000), Thailand (-20,000), and the EU (-20,000).  On the demand side, world exports were 60,000 bales higher, month over month, mostly in offsetting adjustments in Australia (+200,000) and the U.S. (-200,000). World consumption was reduced by 200,000 bales compared to January, mostly in Pakistan (-100,000), Indonesia (-50,000), the EU (-30,000), and Thailand (-20,000).  The result of adding a little production and subtracting a little consumption/trade was a 630,000 bale increase in world ending stocks, month over month.   Such an adjustment would normally be price supportive according to theory and history.

Updated U.S. cotton supply/demand. USDA’s February WASDE adjustments showed no changes to the supply side.  U.S. cotton exports were reduced by 200,000 bales, which went straight to the bottom line of 200,000 more bales of ending stocks.  This is a neutral to modestly bearish adjustment month over month, and remains a price neutral level, year over year.

Fundamental analysis is fairly straightforward in its application.  However, there are a lot of moving parts and uncertainty in balancing supply and demand variables.  The price outlook can also be influenced by non-fundamental factors, particularly in the short run.