US cotton spot prices cooled notably in the final week of June. For the week ending June 25, the average price for base quality cotton across seven designated markets stood at 70.84 cents/lb, down 28 points from the prior week. Although this price remains 5.79 cents above the same period last year, intra-week volatility was sharp, with the spread between the high of 72.68 cents (June 22) and low of 69.28 cents (June 24) reaching 3.4 cents. This choppy pattern reflects a market reassessing supply-demand fundamentals.
More significantly, cumulative 2025/26 season spot sales have reached 1.516 million bales, a 55.6% surge from 974,340 bales a year earlier. The strong volume suggests downstream buying appetite remains resilient despite year-on-year price increases. The ICE December contract closed Thursday at 76.97 cents/lb, up 0.93% on the day. The divergence between the futures rebound and spot weakness indicates growing divergence among market participants.
Weather Divergence Intensifies Quality Risks
Weather conditions across the US Southeast and Southwest diverged sharply this week, with direct implications for the quality and basis structure of deliverable cotton.
In the Southeast, Alabama, Georgia, and the Florida Panhandle received 2-4 inches of heavy rainfall. The US Drought Monitor reported that this precipitation significantly reduced drought coverage. Alabama's cotton squaring rate reached 40%, Georgia's 30%, with early-planted fields gradually entering the boll-setting stage. Favorable soil moisture supports yield potential, but also raises risks of boll rot and pest pressure.
In contrast, while the northern Southeast—including the Carolinas and Virginia—received 0.5-1 inch of rain, the Drought Monitor still indicates widespread dryness. North Carolina's squaring rate is 31%, Virginia 27%, and South Carolina only 17%. This moisture disparity between sub-regions could lead to significant variation in micronaire and fiber strength for new-crop cotton.
The Southwest presents an even more complex picture. After early-week showers subsided, soils in eastern Texas remained overly saturated, with some fields suffering washouts and ponding, hampering field operations. On June 23, the High Plains region was hit by severe thunderstorms producing tornadoes and hail the size of golf balls to tennis balls. Crop damage assessments are underway; multiple dryland fields have already been insured and are slated for replanting to grain sorghum. This suggests final planted acreage and yields in parts of West Texas may fall below earlier expectations.
Structural Shift in Overseas Inquiry Patterns
In the Southwest market, overseas mill inquiries remained scarce, with only Mexico, Peru, and Turkey showing relatively higher buying interest. This structural shift deserves attention from Chinese textile enterprises. Mexico and Turkey typically prefer specific grades and staple lengths, potentially squeezing the availability of comparable quality lots for Chinese buyers.
At current price levels—70.84 cents/lb spot, combined with the RMB exchange rate—an import window has opened for domestic mills. However, weather events, particularly the Texas tornadoes and excessive Southeast rainfall, could cause variability in color grade and leaf content for new-crop cotton, impacting basis quotes. Buyers should focus on specific lot inspection data rather than screen prices alone when placing orders.