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 April WASDE report continued neutral to modestly price weakening in their implication.  Supply side adjustments included a 310,000 bale month over month increase in beginning stocks, mostly in India (+300,000) and Australia (+10,000).  World production was adjusted 0.88 million bales higher in April, compared to March, mostly in India (+300,000), China (+300,000), Pakistan (+300,000) and Turkey (+50,000). World imports in April were a 160,000 bales fewer compared to the previous month, as cuts in Pakistan (-300,000), Bangladesh (-200,000) and Vietnam (-200,000) were partially offset by increases in India (+200,000) and China (+400,000).

On the demand side, world exports were 190,000 bales fewer, month over month, mostly in India (-200,000). World consumption was raised by 560,000 bales compared to March, mostly in India (+500,000), and China (+500,000), and partially offset by Bangladesh (-200,000) and Vietnam (-200,000).  The increase in world supply dominated the net increase in the demand categories give a 650,000 bale increase in world ending stocks, month over month.   Such an adjustment would normally be price neutral to modestly weakening according to theory and history.

Updated U.S. cotton supply/demand. USDA’s April WASDE adjustments showed no changes at all, with a neutral implication.

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.