U.S. cotton spot prices continued to soften in late June. For the week ending June 25, the average price for the seven designated markets’ base quality cotton fell to 70.84 cents per pound, down 28 points from the previous week. Although still 5.79 cents higher year-on-year, the intraweek volatility was notable—from a high of 72.68 cents on Monday to a low of 69.28 cents on Wednesday, a spread of 3.4 cents that reveals growing market disagreement over supply-demand prospects.
A Structural Shift in Spot Sales
A key signal: cumulative spot sales for the 2025/26 marketing year (since August 1, 2025) reached 1.516 million bales, a 55.6% jump from the same period last year. This suggests that despite current low prices, mills and traders are increasingly locking in forward contracts. The rationale is clear: global textile capacity continues shifting to Southeast Asia, and U.S. cotton remains a must-have high-grade fiber. The price trough is attracting more buyers. However, spot trading was thin last week, indicating that most procurement is being done through forward contracts rather than immediate purchases, which caps any short-term price rebound.
Weather Divergence: Southeast Relief vs. Southwest Waterlogging
U.S. growing regions experienced starkly different weather. In the Southeast—especially Alabama, Georgia, and the Florida Panhandle—2-4 inches of rain significantly eased earlier drought. The U.S. Drought Monitor reported a sharp reduction in dry areas. Alabama’s cotton squaring rate hit 40%, Georgia’s 30%, with early-planted fields already entering the boll stage. This bodes well for yield expectations but also means that if the weather turns dry, supply pressure could further depress prices.
In contrast, Texas presents a troubling picture. Eastern and southern Texas saw excessive rainfall, leaving soils saturated and low-lying fields waterlogged, halting field operations. Industry sources report yellowing leaves in some plants, though most fields remain on track. More extreme: on June 23, the High Plains region was hit by tornadoes and hail the size of golf balls to tennis balls. Crop damage assessments are underway, and some severely damaged dryland fields have been insured and are slated for replanting to sorghum. This raises the risk of downward revisions to both planted acreage and yield for the 2026/27 crop.
Overseas Demand: Mexico, Peru, Turkey as Price-Sensitive Buyers
Overseas mill inquiries were scarce, with only Mexico, Peru, and Turkey showing relatively strong buying interest. This highlights the current procurement logic in the global cotton-textile chain: buyers closer to U.S. origin or with rigid demand for high-grade cotton tend to fill inventory during price dips. The absence of major buyers like China and Vietnam suggests slower domestic inventory digestion or a preference for even lower entry points.
ICE Cotton: Technical Rebound, Weak Fundamentals
ICE December cotton futures settled Thursday at 76.97 cents/lb, up 0.93% on the day. The bounce was more from oversold technical buying than fundamental improvement. The widening basis between spot and futures indicates that spot market absorption is weaker than the futures market. For hedgers, this basis structure is unfavorable for locking in margins, encouraging growers to hold rather than sell.