The US cotton spot market is undergoing a moderate but notable price correction. For the week ending June 25, the average price for base quality cotton across seven designated markets fell 28 points to 70.84 cents/lb. While still nearly 9% higher than the 65.05 cents/lb recorded a year ago, the intra-week price range widened considerably—from a high of 72.68 cents/lb on Monday to a low of 69.28 cents/lb on Wednesday, a swing of nearly 5%. This price action reflects a three-way tug-of-war between divergent regional weather, strong new-crop sales volumes, and persistently weak downstream demand.
Regional Weather: Beneficial Rains in the Southeast, Severe Storms in the Southwest
Widespread rainfall swept across the US Southeast this week. Central and southern Alabama, Georgia, and the Florida Panhandle received 2-4 inches of accumulated rain. According to the US Drought Monitor, these heavy rains significantly reduced the extent and severity of drought in those areas. Alabama's cotton squaring rate reached 40%, Georgia's 30%, with early-planted fields gradually entering the boll-setting stage. In contrast, the northern reaches of the Southeast—including eastern parts of the Carolinas and Virginia—received only 0.5-1 inch of rain, and large areas remain under severe drought conditions.
The weather story in the Southwest is more extreme. Eastern Texas cleared after early-week showers, but soils remain excessively wet, with some fields suffering from washing and ponding. The Coastal Bend region has received over 20 inches of rain in the past 60 days, significantly boosting depleted reservoir levels at Lake Corpus Christi and elsewhere. However, persistently saturated soils have caused yellowing in some cotton plants. More alarmingly, on June 23, severe thunderstorms spawned tornadoes and hail the size of golf balls to tennis balls across the High Plains of Texas. Crop damage assessments are underway, and some dryland fields have already been insured and scheduled for replanting to grain sorghum.
New-Crop Sales: A Volume Surge with Structural Caveats
Cumulative spot sales for the 2025/26 season (starting August 1) reached 1.516 million bales, a 56% increase from 974,340 bales a year earlier. While this headline number might suggest robust demand, the current thin trading environment and sparse overseas inquiries tell a different story. A more plausible interpretation is that the volume surge reflects the concentrated fulfillment of forward contracts locked in at earlier, lower prices, rather than a genuine revival of end-user demand. Mexico, Peru, and Turkey remain relatively active buyers, but their procurement volumes are insufficient to reverse the overall weak demand picture.
Futures Market: A Brief Bounce Amid Downward Pressure
ICE December cotton futures settled 0.71 cents higher at 76.97 cents/lb on Thursday, but this bounce appears more technical than fundamental. The core market contradiction is clear: new-crop development is generally favorable (squaring rates range from 17% to 40% in the Southeast), while downstream textile mills show little appetite for new purchases. This "supply-side easing, demand-side sluggish" dynamic continues to exert downward pressure on prices.