Spot prices for US cotton experienced a significant correction in the second week of June. According to the latest USDA weekly report, the average price for base quality cotton across seven designated markets fell to 67.44 cents per pound for the week ending June 11, down 397 points or approximately 5.6% from the previous week. While this price remains 4.73 cents higher than the same period last year, the weekly decline is the largest single-week drop of the current marketing year. ICE futures mirrored the weakness, with the July contract settling at 72.49 cents per pound, down 2.40 cents week-on-week, while the active December contract closed at 76.36 cents, down about 1.4%.
Market Signals from Price-Volume Divergence
Notably, the sharp price drop coincided with a surge in trading volume. Cumulative certified sales for the 2025/26 marketing year (starting August 1, 2025) reached 1.507 million bales, a 55.6% increase from 967,719 bales in the same period last year. This 'price-down, volume-up' combination typically suggests downstream buyers are actively restocking after a price correction, but also implies a more conservative outlook on future prices. Regionally, spot trading in the Southeast was slow with moderate supplies, while the Southwest Texas region saw thin trade with low grower offerings—widening supply-demand gaps across regions.
The daily average price range slid from a high of 68.79 cents on June 5 to a low of 66.14 cents on June 10, a spread of 2.65 cents over five trading days, reflecting rapid shifts in market sentiment. For buyers, this volatility means the window for locking in prices is narrowing, requiring close tracking of weekly USDA data.
Weather Divergence Adds Supply Uncertainty
Major US cotton regions experienced contrasting weather patterns during the week, which will directly impact final production. The southern Southeast saw mostly partly cloudy and cooler conditions, with scattered rainfall bringing up to 3 inches to parts of Alabama and Georgia, improving drought conditions. However, reservoir and lake levels recovered slowly, indicating lingering soil moisture deficits. Planting progress is near completion: Alabama 91%, Georgia 85%, South Carolina 92%, North Carolina and Virginia both 86%—with the earliest planted fields already squaring.
The Southwest Texas situation is more complex. Eastern areas saw early-week rain followed by summer heat, with 0.25-3.5 inches in the Blackland Prairie region, where earliest planted cotton has begun blooming. But the Upper Gulf Coast faces excessive moisture from persistent heavy rains, causing yellowing plants and prompting insurance adjusters to assess potential abandonment. The Lower Rio Grande Valley reports increasing pest pressure, with field scouting and pesticide applications underway. The Texas West-Kansas-Oklahoma region received 0.75-4 inches of beneficial rain, though some northern High Plains fields experienced stand failure.
This 'drought and flood coexisting' pattern complicates yield forecasting. For mills and traders, it means developing more flexible procurement strategies to avoid being forced to chase prices during extreme weather events.
Downstream Demand: Cautious Domestic, Moderate Export
On the demand side, domestic mill buyers only showed moderate inquiries for color 41, leaf 4, staple 35 and above cotton, with delivery targeting November/December 2026—a forward inquiry suggesting mills see current prices as not yet attractive enough to lock in. No actual trades were reported, and yarn demand was described as 'slow to moderate,' with mill sentiment remaining cautious.
Export demand was moderately active but regionally divergent. Southwest Texas reported heavier inquiries from India, Pakistan, and Vietnam, while the Southeast saw no similar activity. Southeast Asian buyers' concentrated inquiries during the price decline may indicate they are using the dip to replenish raw material inventories, especially given persistently high domestic cotton prices in India.