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 July WASDE report reflected mostly minor adjustments to the old crop world cotton balance sheet, which is not unusual for the latter marketing year period.  Due to increased historical consumption in India and Malaysia, world beginning stocks were 1.19 million bales lower compared to June.  This was the biggest adjustment on the supply side as world production was reduced only 80,000 bales and world imports were reduced 240,000 bales.   In summary, world supply was lower across the board, compared to the June WASDE estimates.

On the demand side, world exports saw a net 70,000 bale cut month-over-month, with offsetting adjustments across a number of countries.  World consumption was raised 220,000 bales compared to cut 290,000 bales.  The bottom line of all these net adjustments was a net 1.66 million bale decrease in world ending stocks, month over month. The direction and resulting level of the adjustment would be price supportive according to history and economic theory.

Updated U.S. cotton supply/demand.  The only adjustment to the July U.S. balance sheet for the 23/24 marketing year was the 200,000 bale cut in estimated U.S. exports, to 11.8 million bales.  This jibes with the recent slow pace of export shipments.  This adjustment went straight to the bottom line with 200,000 bales more of ending stocks, to 3.05 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.