82.71 cents per pound. That was the settlement for ICE December cotton on September 25, down 0.72% on the day, yet still up 1.92% for the week. A falling session inside a rising week is not a contradiction — it is a signal that cotton prices are being pulled between the dollar, crude oil, export data and weather, rather than driven by any single force. For buyers and exporters along the textile chain, reading the direction of that tug-of-war matters more than tracking a single day's move.
Export Sales: The Real Price Floor
The USDA weekly export sales report is the hardest support under current cotton prices. For the week ending September 17, net sales of U.S. upland cotton for the current marketing year reached 230,517 bales, up 224% from the prior week and 244% above the four-week average. What does this mean? Even as the dollar strengthens and grains and oils weaken broadly, overseas buyers are still accelerating their lock-in of U.S. cotton, suggesting end-user restocking demand has not vanished under macro pressure.
The structure matters: net sales to China fell by 4,702 bales for the current year, and stood at zero for the next marketing year. Chinese buying has slowed, but other markets filled the gap. For domestic mills, this hints that global cotton trade flows are being redistributed, and factories reliant on U.S. cotton need to evaluate alternative origins or adjust their cotton blending plans earlier.
Macro and Substitutes: Two Forces of Pressure
The dollar index edged lower on September 25 but remained near a two-month high touched the previous session, on track for a second consecutive weekly gain. After the Federal Reserve's 25-basis-point hike, officials' comments reflected both inflation concerns and support for further tightening, pushing Treasury yields higher. A stronger dollar directly raises the cost of dollar-denominated cotton for overseas buyers — the first layer of pressure above prices.
The second comes from crude. Oil fell more than 2% that day as the market weighed a possible U.S.-Iran ceasefire against Houthi attacks on Saudi Arabia. Lower oil prices reduce the production cost of polyester, cotton's substitute, eroding cotton's relative competitiveness. For buyers, this means the spread between staple fiber and cotton may reopen, creating a window to adjust blend ratios.
Weather Premium: What 72% Drought Area Means
Data compiled by the USDA's Office of the Chief Economist from drought monitor maps showed that as of the week ending September 22, about 72% of U.S. cotton areas were affected by drought, up from 65% the prior week and far above 49% a year earlier. A 7-percentage-point jump in two weeks is not a number to ignore.
The weather premium logic: if drought persists, U.S. cotton yields and quality could be revised down, tightening next-year supply expectations. This is why strong export sales and expanding drought can together support a weekly gain — the former represents current demand, the latter future supply uncertainty.
The spot market confirms the signal. The Cotlook A Index stood at 93.75 cents per pound on September 25, up 50 points, showing that the firmer tone in futures has passed through to physical quotes.