On June 24, 2026, ICE cotton futures extended their losing streak to a fourth consecutive session, with the active December contract settling at 76.26 cents per pound, down 3.14% from the prior session and hitting a two-week low of 76.15 cents. The July contract also fell 1.66% to 73.96 cents. The cumulative decline over the four sessions has exceeded 5%, signaling a pronounced bearish turn.
Dual Macro Headwinds: Strong Dollar and Plunging Oil
The primary catalyst for the cotton sell-off came from the macro front. The US dollar index surged to 101.8 during the session, its highest level since May 12, 2025, before closing at 101.58, up 0.19%. Market expectations of continued Federal Reserve rate hikes, coupled with a risk-off sentiment triggered by a tech stock sell-off, have driven the dollar to a 13-month peak. A stronger dollar makes US-denominated cotton more expensive for overseas buyers, directly dampening demand.
Simultaneously, Brent crude oil plummeted over $3 per barrel to its lowest since before the Iran conflict, as more stranded tankers cleared the Strait of Hormuz, alleviating supply concerns. Lower oil prices reduce the production cost of polyester, cotton's primary synthetic competitor, narrowing cotton's price advantage. Industry data shows that cotton peaked above 88 cents per pound on May 13, meaning current prices have retreated over 13% from that high.
Fundamentals: Slowing Exports and Pre-Report Caution
Weak demand signals are also weighing on the market. The USDA's weekly export sales report for the week ending June 11 showed net sales of 177,100 bales for the 2025/26 season, down 15% from the previous week. Export shipments totaled 251,000 bales, a 16% decline week-on-week. The concurrent decline in both metrics reflects a cautious stance among global textile buyers amid macroeconomic uncertainty.
Market attention is now focused on the USDA's Acreage and Stocks report scheduled for June 30. A Kansas-based commodity analyst noted that before that report, cotton prices may find some support as the market awaits clearer signals on new-crop prospects following post-drought rains. However, the overall direction remains contingent on the data. Additionally, the USDA's weekly export sales report due June 25 will provide further short-term cues.
Spot Market Follows Futures Lower
The bearish sentiment has spilled over into the physical market. The Cotlook A index closed at 87.55 cents per pound on June 24, down 75 points from the previous day. While lower spot prices reduce procurement costs for downstream mills, they also indicate a wait-and-see attitude among global cotton traders.
Industry Implications: Practical Advice for Buyers and Exporters
For the textile supply chain, the sustained decline in cotton prices presents both risks and opportunities. Buyers can use this window to lock in lower raw material costs, but must be wary of potential volatility from the June 30 USDA report. Exporters need to manage currency risk: a stronger dollar means that the effective cost of cotton imported in RMB may not have fallen proportionally, making hedging tools like forward contracts essential.