US cotton spot prices experienced a notable correction in early June. According to the latest USDA weekly report, the average price for base quality cotton across seven designated markets fell 397 points to 67.44 cents/lb for the week ending June 11, hitting a recent intra-week low of 66.14 cents/lb. While still above the year-ago level of 62.71 cents/lb, the nearly 4-cent weekly drop warrants attention from buyers accustomed to range-bound markets.
Demand Resilience Beneath the Price Drop
Contrary to surface impressions, lower prices did not dampen buying interest. Cumulative 2025/26 crop spot sales reached 1.507 million bales, up 56% from 967,719 bales a year earlier. This divergence suggests the price pullback is more about macro sentiment and fading weather premiums than fundamental demand erosion. On ICE, the July contract settled at 72.49 cents/lb, while the more active December contract closed at 76.36 cents/lb, maintaining a contango structure that signals lingering supply concerns.
From the demand side, domestic mills are inquiring for color 41, leaf 4, staple 35 and above grades for November/December 2026 delivery, indicating forward procurement for the next crop year. Export channels remain active, with inquiries from India, Pakistan, and Vietnam described as moderate to good. Southeast Asian spinners are not backing away despite the spot price decline.
Divergent Weather: Drought Relief vs. Excess Moisture
Weather conditions across major US cotton belts show a clear north-south split. In the Southeast, Alabama and Georgia planting reached 91% and 85% respectively, with earliest fields already squaring. Drought conditions improved across much of the region, though Virginia's eastern areas saw expanding drought and North Carolina's coastal plain reported worsening dryness, posing potential yield risks.
Texas presents a more mixed picture. In East Texas, earliest planted fields in the Blackland Prairie have begun blooming, but boll weevil pressure is rising, requiring insecticide applications. The Upper Gulf Coast has experienced persistent heavy rains, leaving some fields waterlogged and cotton plants yellowing. Insurance adjusters are assessing potential abandonment. In contrast, West Texas, Kansas, and Oklahoma received beneficial rainfall of 0.75 to nearly 4 inches, boosting confidence, though some northern High Plains fields suffered emergence failures.
Practical Implications for Procurement and Trade
The core dynamic in the US cotton market is clear: spot prices are falling sharply, yet new-crop volumes are doubling, suggesting strong buyer acceptance at current levels. For Chinese importers, the 67 cents/lb area offers a reasonable margin of safety, especially given tightening global ending stock expectations for 2025/26.