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 adjustments in the April WASDE report reflected very minor adjustments to 2024/25 world cotton balance sheet.  This is not unusual given the time of the year.

Beginning world stocks were mostly unchanged, month over month, while world production was only 70,000 bales fewer compared to the previous month, mostly in China (+250,000), partially offset by West Africa (- 100,000) and the EU (-50,000).  The aggregate change in world imports was 330,000 bales fewer than in March, owing to a number of offsetting adjustments:  China (-300,000 bales), Turkey (+100,000), Indonesia (-100,000), and Mexico (-50,000).  Overall there was a very modest decrease in world supply.

Demand-side monthly adjustments included a 520,000 bale decrease in world domestic use, also in China (-500,000), Turkey (+100,000), Indonesia (-100,000), and Mexico (-50,000) .  World exports were 380,000 bales fewer, month over month, mostly in the U.S. (-100,000), West Africa (-180,000), Australia (-100,000), Brazil (-100,000), and the EU (-30,000), and then partially offset by Turkey (+200,000), Central Asia (+50,000), and Indonesia (+10,000).  The demand-side reductionss dominated those on the supply-side side, so the bottom line of all these adjustments was a modest 530,000 bale increase in world ending stocks.  This adjustment would be historically neutral.

Updated U.S. cotton supply/demand.  The APril  WASDE saw no month-over-month adjustments to the supply side of U.S. balance sheet.  This is not unusual since USDA is waiting for the final ginning and classing data (in May).  On the demand side, U.S. exports was reduced by 100,000 bales, which went straight to the bottom line of 100,000 more bales of ending stocks, month over month.  While neutral in the adjustment, this leaves U.S. ending stocks at a bearish 5.0 million bales.

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.