US cotton spot prices pulled back notably in late June. According to USDA data for the week ending June 25, the average price for base quality cotton across seven designated markets was 70.84 cents/lb, down 28 points from the previous week. Despite the weekly decline, the price remained 5.79 cents higher than a year ago, a year-on-year increase of nearly 9%, indicating a significantly elevated price floor.
More striking is the new crop (2025/26) sales data. Since the start of the marketing year on August 1, cumulative spot sales have reached 1,516,429 bales, up 56% from 974,340 bales in the same period last year. This explosive growth is not a short-term blip but a sustained trend, suggesting textile mills worldwide are actively locking in forward supplies at relatively low prices and deepening their reliance on US cotton.
Price Volatility and Futures Linkage
Daily spot prices fluctuated sharply during the week, with a range of 3.4 cents/lb. The high of 72.68 cents/lb was reached on Monday, June 22, followed by a steady decline to a low of 69.28 cents/lb on Wednesday, June 24, before a modest recovery on Thursday. ICE December cotton futures settled at 76.97 cents/lb on Thursday, up 0.71 cents, but the futures premium remained above 6 cents, reflecting ongoing market concerns about future supply.
The divergence between falling spot prices and rising futures suggests that the spot market is more influenced by short-term supply-demand rhythms—growers holding back and mills pressing for lower prices—while futures are trading on weather and acreage uncertainties. For buyers, this means waiting for further spot declines risks higher futures costs.
Divergent Weather Patterns Across Growing Regions
The Southeast received much-needed rainfall. Alabama, Georgia, and the Florida Panhandle recorded 2-4 inches of weekly precipitation, significantly easing earlier drought conditions. The US Drought Monitor reported a notable reduction in drought coverage and severity in these areas, with soil moisture now adequate for cotton entering the squaring and early boll-setting stages. Alabama had a 40% squaring rate, Georgia 30%, with early-planted fields gradually moving into boll formation.
However, the northern Southeast—the Carolinas and Virginia—remains under drought stress despite scattered thunderstorms delivering 0.5-1 inch of rain. North Carolina's squaring rate was only 31%, Virginia 27%, and South Carolina 17%, indicating slow progress. This north-south divergence suggests a potential "south up, north down" production pattern, which will require close monitoring for final yield impacts.
The Southwest presents a different set of challenges. East and South Texas received excessive rainfall, leaving fields waterlogged, impeding field operations, and causing standing water in low-lying areas, with some cotton plants showing yellowing leaves. The Coastal Bend region recorded over 20 inches of rain in the past 60 days, which refilled reservoirs but also saturated soils. In contrast, West Texas and the High Plains were hit by severe thunderstorms, including tornadoes and hail ranging from golf ball to tennis ball size. Crop damage assessments are underway, and some dryland fields are being replanted to grain sorghum.
Kansas and Oklahoma fared moderately: Kansas saw beneficial rainfall but wind delays; Oklahoma's intermittent showers aided seedling establishment, though weed pressure is high and pest control is limited.
Spot Trading and Procurement Signals
Spot trading was generally light, but overseas inquiries showed structural patterns. Mexico, Peru, and Turkey stood out with relatively strong buying interest, while other regions remained cautious. Growers in both East and West Texas had limited available supplies and showed only moderate willingness to sign forward contracts, maintaining a holding mentality.
Crucially, despite the weekly spot price decline, new crop cumulative sales surged 56% year-on-year. This indicates that downstream mills are not retreating due to short-term price weakness but are instead using the dip to build inventories. The signal is clear: against a backdrop of tight global stocks and reduced planting intentions in major producing countries, US cotton's strategic procurement value is being repriced.