US cotton spot prices are presenting an intriguing divergence: weekly averages softened slightly, yet cumulative annual volume surged 55% year-on-year, signaling a different story. 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, with daily quotes ranging between 69.28 and 72.68 cents/lb. The ICE December contract closed Thursday at 76.97 cents/lb, up 0.93%.
Annual Volume Surge: Global Restocking Cycle May Be Underway
Cumulative spot volume for the 2025/26 season (starting August 1) reached 1.516 million bales, a 55.6% increase from 974,340 bales in the same period last year. This data point goes far beyond what weekly price fluctuations can explain. The Texcircle Editorial Board believes the surge in annual volume more likely points to the global textile industry entering an active restocking phase after the previous destocking cycle. Recovered yarn mill operating rates in China, Vietnam, and Bangladesh in the second half of 2025 have directly boosted demand for US cotton. Although weekly spot trading was thin, the high annual growth rate suggests that large-scale purchases were concentrated in prior weeks, and the current weakness is merely a phase of procurement rhythm adjustment.
Regional Weather Divergence: Southeast Eases Drought, Southwest Faces Extremes
Weather patterns across US cotton-growing regions diverged sharply in late June. The Southeast received widespread thunderstorms, with Alabama, Georgia, and the Florida Panhandle accumulating 2 to 4 inches of weekly rainfall. The US Drought Monitor reported a significant reduction in drought coverage across these areas. Adequate soil moisture is favorable for squaring and boll setting—Alabama's squaring rate reached 40%, and Georgia's 30%. However, the Carolinas and Virginia, despite some precipitation, still face widespread drought; North Carolina's squaring rate is only 31%.
In the Southwest, Texas experienced extreme weather. The High Plains region was hit by a tornado on June 23, with hail ranging from golf ball to tennis ball size. Some cotton fields suffered severe wind damage, and multiple dryland cotton plants have been insured and are planned to be replaced with sorghum. Additionally, persistent heavy rains in eastern and southern Texas have left soils saturated and furrows waterlogged, causing yellowing in some plants. Industry sources say low-lying fields remain severely flooded, forcing growers to use drones for pest and weed control. Most of West Texas remains dry, with cotton at various stages from just emerged to about to square.
Structural Contradictions Behind Thin Spot Trading
Spot trading was generally thin during the week, with limited market supply and grower offerings, and weak demand. However, overseas mill inquiries were not entirely absent—Mexico, Peru, and Turkey showed relatively strong buying interest. This reveals a structural contradiction in the current US cotton market: on one hand, global textile end-demand recovery is uneven, with US and European retail orders not yet significantly picking up, causing traditional large buyers like China and Vietnam to slow their procurement pace; on the other hand, spinners in South Asia, the Middle East, and Latin America, benefiting from favorable exchange rates or regional trade agreements, are accelerating their locking of US cotton supplies. For buyers, although current prices are nearly 6 cents/lb higher than a year ago, the high annual volume growth suggests the price floor may move higher in the second half of the year, making timely forward contract locking more risk-rewarding than waiting for a pullback.