US cotton spot prices experienced a sharp weekly decline. For the week ending June 11, the average price for base quality cotton across seven designated markets fell to 67.44 cents per pound, dropping 397 points from the previous week. Although this remains above the 62.71 cents seen a year ago, the magnitude of the weekly loss signals a market repricing of both new-crop supply prospects and sluggish downstream demand.
Price and Volume: Spot Weakens, Forward Contracts Active
The daily spot price range for the week was between 66.14 and 68.79 cents per pound, with the low occurring on June 10. ICE futures followed suit: the July contract settled at 72.49 cents, down 2.4 cents from the prior week, while the most active December contract closed at 76.36 cents, a decline of 1.41%. The widening futures-spread suggests growing expectations of near-term supply loosening.
Notably, despite the price drop, spot sales for the new crop year (2025/26, starting August 1) surged 55.7% year-on-year to 1.507 million bales, compared to 967,719 bales in the same period last year. This contrast indicates that downstream mills and traders are using the price correction to restock, particularly ahead of the new crop arrival. Increased inquiries for forward contracts confirm this trend.
Crop Progress and Weather: Drought Eases but Local Concerns Remain
Weather conditions across major US cotton regions were mixed. In the Southeast, mostly cloudy skies and scattered rainfall brought drought relief to Alabama and Georgia. Planting progress stood at 91% in Alabama and 85% in Georgia, with South Carolina at 92%, and North Carolina and Virginia at 86%. The earliest planted fields have begun to square.
Conditions in the Southwest were more complex. After early-week rains, eastern Texas turned sunny and hot, but the Upper Gulf Coast region saw persistent heavy rainfall, leaving some fields waterlogged and cotton plants yellowing. Insurance adjusters have been assessing fields for potential abandonment. Some areas require replanting, while others are being planted for the first time. In western Texas, Kansas, and Oklahoma, beneficial rainfall of 0.75 to 4 inches boosted confidence, though emergence failures were reported in the northern High Plains. Planting continues to meet insurance deadlines, with nighttime operations in some areas, reflecting producers' urgency to secure acreage.
Downstream Demand: Domestic Cautious, Export Inquiries Concentrated
Domestic mill buying remained cautious. Yarn demand was slow to moderate. Buyers inquired for limited quantities of color 41, leaf 4, staple 35 and above cotton, primarily for November/December 2026 delivery, but no sales were reported. This suggests mills are managing inventory on a hand-to-mouth basis, unwilling to build stocks in a falling market.
Export demand was moderate, with inquiries concentrated from India, Pakistan, and Vietnam. These traditional buyers are key price supporters, but current inquiries are only 'moderate', indicating overseas mills are also waiting for clearer price signals.
Industry Impact and Outlook
The sharp decline in US cotton spot prices results from multiple factors: expectations of higher global production, improved US crop prospects due to favorable weather, and sluggish downstream textile demand. However, the surge in new-crop spot sales and active forward contracting suggest the market is not entirely bearish, but rather seeking value in the downturn.
For Chinese textile mills, lower US cotton prices reduce import costs, easing pressure on high-grade cotton supply. However, if weather turns adverse during the critical July-August growing period, prices could rebound quickly. The current spot price of 66-67 cents is near the cost of production for some farmers, limiting further downside.