76 cents. On June 25, this price level became a key battleground for the cotton market. The ICE most-active December contract dipped to 76.09 cents per pound—its lowest since June 11—before rebounding to settle at 76.97 cents, a gain of 0.93%. For the textile supply chain, whether this price zone holds will directly shape raw material cost expectations and procurement strategies.
Deconstructing the Rebound: Dollar, Oil, and Sentiment
This rebound was not driven by a fundamental turnaround but by a convergence of short-term trading factors. The US dollar index retreated after three consecutive days of gains, following a series of US inflation data that weakened expectations for a Fed rate hike this year. A softer dollar makes dollar-denominated commodities cheaper for overseas buyers, providing immediate psychological support for cotton.
Meanwhile, international oil prices rose over 2% after a vessel was attacked near Oman, reigniting concerns about the timeline for restoring Middle East oil supply. The transmission mechanism between oil and cotton is clear: crude is the primary feedstock for polyester, and higher oil prices raise the cost of synthetic fibers, indirectly boosting demand expectations for natural cotton.
More direct impetus came from technical buying. StoneX senior vice president Bailey McHenry noted that after a sharp sell-off the previous day, speculative funds actively repositioned near 76 cents, forming a clear support level. This dip-buying behavior carries a strong short-term speculative flavor but also signals that 76 cents is a perceived "value anchor" in current market psychology.
Export Data Reveals the True Demand Picture
Beneath the rebound, however, lies a troubling signal. The USDA's weekly export sales report showed net sales of current-crop US cotton at just 83,864 bales for the week ending June 18—down 53% from the prior week and 61% below the four-week average. Even including forward sales for the next crop year, total net sales reached only 150,953 bales.
Shipment data also warrants attention: 300,155 bales were shipped, up 20% week-on-week, but shipments to China were merely 12,248 bales, accounting for less than 5% of total shipments. As the world's largest cotton consumer, China's slower buying pace exerts considerable downward pressure on international prices. If the current-crop sales pace continues to lag, it will reinforce expectations of rising ending stocks, weighing on far-month contracts.
Industry Belt Perspective: Price Tug-of-War Reaches Procurement Decisions
Feedback from domestic textile clusters such as Keqiao and Nantong indicates that weaving mills remain cautious about raw material procurement. Cotton's repeated oscillation in the 76-78 cent range has led downstream fabric mills to favor short-cycle and quick-turn orders to avoid margin erosion from price volatility. Traders in the Shengze area report that while foreign order inquiries have picked up, actual transactions are mostly for urgent replenishment, with little appetite for building inventory.
This tug-of-war between upstream and downstream determines the sustainability of the rebound, which hinges on two key variables: whether the dollar can sustain its weakness on a macro level, and when Chinese buyers reopen their procurement window on an industrial level. If neither shows a clear turning point, support near 76 cents may prove to be merely a technical "breather," not a trend reversal.