The US cotton spot market is navigating a subtle inflection point. For the week ending June 25, the average price for base quality cotton across seven designated markets fell 28 points to 70.84 cents per pound. While this decline appears modest, it takes on greater significance against the backdrop of a 55.6% surge in cumulative sales for the 2025/26 season, suggesting that buyers are becoming increasingly price-sensitive.
More telling is the intra-week price range: daily averages swung from a high of 72.68 cents on Monday to a low of 69.28 cents on Wednesday, a volatility of nearly 3.4 cents within three days. Such short-term turbulence typically indicates a market lacking clear direction, with both buyers and sellers awaiting stronger supply-demand signals.
Weather Divergence: Rain in the Southeast, Disaster in the Southwest
The weather narrative across US cotton-growing regions is splitting into two starkly different stories. The Southeast recently received widespread thunderstorms, with parts of south-central Alabama, Georgia, and the Florida Panhandle recording 2 to 4 inches of weekly rainfall. According to the US Drought Monitor, this timely precipitation significantly reduced drought coverage and improved soil moisture, benefiting cotton fields that are entering the squaring stage—Alabama's squaring rate has reached 40%, while Georgia's stands at 30%.
In the Southwest, however, the story is far less favorable. On June 23, the High Plains region of Texas was hit by severe thunderstorms, including tornadoes and hail ranging from golf ball to tennis ball size. Damage assessments are underway, and some dryland cotton fields have already been appraised for insurance claims with plans to replant with grain sorghum. Meanwhile, persistent heavy rains in eastern Texas have left soils saturated and low-lying fields waterlogged, causing yellowing in some cotton plants. Industry sources indicate that while conditions have improved as weather dries, field operations remain hampered.
This weather divergence has structural implications for production expectations. The beneficial rains in the Southeast may be partially offset by disaster losses in the Southwest, the latter being the primary cotton-producing region. For Chinese buyers, this raises the risk of downward revisions to the new crop's exportable supply.
Thin Trading, Concentrated Overseas Inquiries
Spot market activity remains subdued. USDA reports indicate light trading across both the Southeast and Southwest, with farmer selling interest and downstream demand ranging from moderate to low. Overseas inquiries are scarce and highly concentrated among just three countries: Mexico, Peru, and Turkey. This narrow inquiry pattern reflects regional divergence in global textile end-demand—major buyers in Southeast and South Asia are noticeably lagging in their procurement pace.
The ICE futures market tells a different story: the most actively traded December contract rose 0.71 cents on Thursday to settle at 76.97 cents per pound. The resulting futures-spread premium of over 6 cents suggests some market expectation of tighter远期 supply. Yet the weakness in the spot market indicates that this expectation has not yet translated into actual purchasing.
New Crop Supply Picture: Strong Data, Hidden Risks
On a cumulative basis, the 2025/26 season has been robust. Total spot sales reached 1.516 million bales as of June 25, a 55.6% increase from 974,340 bales in the same period last year. This data point would normally support prices, but the current downward trend suggests the market is more focused on near-term supply pressure than long-term demand growth.
A key variable is the acreage of Texas cotton fields that will be replanted to sorghum. If the conversion rate exceeds expectations, it will directly reduce new-crop US cotton output. While Southeast fields are developing well, their per-acre yields are typically lower than those of irrigated Southwest fields, limiting their ability to compensate for losses.