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 November WASDE report were fairly small and/or offsetting.  World beginning stocks were raised 200,000 bales, mostly from a 100,000 bale increase in India.  World production was raised 860,000 bales, mostly in the U.S. (+270,000) and several other minor producing countries.   World imports were raised by a mere 70,000 bales, resulting from a half million bale increase in China, mostly destined for their state reserves, was mostly offset by cuts in several importing countries.  On the demand side, world exports were likewise raised 70,000 bales resulting from a handful of offsetting adjustments.  World consumption was cut 490,000 bales, mostly in Vietnam (-200,000), Turkey (-100,000), the U.S. (-100,000), Mexico (-50,000) and Thailand (-50,000).  The bottom line of all these adjustments was a 1.58 million bale increase in world ending stocks, month over month. The direction and resulting level of the adjustment would be neutral to modestly price weakening according to history and economic theory.  In particular, the static aspect of the demand adjustments, other than the policy driven Chinese Reserve imports, is not particularly encouraging.

Updated U.S. cotton supply/demand.  The adjustments to U.S. supply were also modestly bearish as the 270,000 bale net increase in production was reinforced by the 100,000 bale cut to domestic use.  The bottom line of this was a 400,000 month over month addition to U.S. ending stocks, to 2.8 million bales (see balance table above).  This month over month adjustment would be moderately price weakening in its size and neutral in the resulting level.

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.