US cotton spot prices showed a clear softening trend in the final week of June. 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 about 5.8 cents higher than the same period last year, intra-week volatility was notable—prices ranged from a high of 72.68 cents/lb on June 22 to a low of 69.28 cents/lb on June 24, a spread of 3.4 cents, reflecting deep market disagreement over near-term supply and demand.
Surging Sales Reveal Demand Logic
A telling signal is that cumulative 2025/26 season (starting August 1, 2025) spot sales reached 1.516 million bales, a 55.6% surge from 974,340 bales a year earlier. This growth far exceeds the price increase, suggesting downstream mills and traders are using the price dip to restock aggressively. The most-active ICE December contract rebounded 0.71 cents to 76.97 cents/lb on Thursday, providing some floor support.
However, the current volume surge is more about 'price-sensitive' demand than a genuine recovery in end-use consumption. Spinners in Southeast and South Asia, after digesting earlier raw material inventories, have shown clear interest in cotton below 70 cents/lb—inquiries from Mexico, Peru, and Turkey were relatively active, but overall overseas buying sentiment remains cautious.
Extreme Weather Disrupts New Crop Growth
More concerning than spot prices are the extreme weather events unfolding across major US cotton-growing regions. In the Texas High Plains, a severe thunderstorm on June 23 produced tornadoes and hail the size of golf balls to tennis balls. Local agricultural authorities have launched damage assessments; some cotton fields were severely hit by high winds, and multiple dryland cotton plants have been insured and scheduled for replanting to grain sorghum.
Meanwhile, eastern and southern Texas face the opposite problem—too much rain. The Coastal Bend northern area received over 20 inches of rain in the past 60 days, leaving fields waterlogged and furrows flooded. Some low-lying fields show yellow leaves. While the abundant rain has refilled depleted reservoirs, excess moisture is now hindering root development and squaring progress.
- Alabama and Georgia received 2-4 inches of weekly rain, sharply reducing drought coverage but also causing runoff and erosion in some areas.
- North Carolina and Virginia saw scattered showers, but the US Drought Monitor still reports widespread drought there; cotton squaring rates are only 17%-31%.
- Kansas rainfall ranged from trace amounts to 9 inches; some cotton seedlings are weak from cold stress and need warm sunny weather to recover.
Supply Contraction Expectations Forming
In summary, the US cotton crop faces a complex 'drought-flood coexistence, extreme weather frequent' scenario during the critical growth phase. Texas, the largest cotton-producing state, is simultaneously hit by tornadoes in the High Plains and flooding in coastal areas, which will directly reduce harvestable acreage and yield potential for the 2026/27 season. Although USDA has not yet adjusted production estimates, market concerns about forward supply have already been priced into futures—the ICE December contract bounced sharply from the week's low of 69.28 cents to 76.97 cents, indicating capital is pricing in weather risk.
For Chinese textile mills, this means the window for importing cotton at attractive prices may be narrowing. The current level around 70 cents/lb is highly appealing, but once official data confirms a production shortfall, US cotton prices could rise back above 80 cents.