The latest weekly export sales report from the USDA poured cold water on the cotton market. For the week ending June 25, total net sales of US upland cotton reached 93,118 bales, with current-season net commitments of just 49,001 bales—a 42% drop from the previous week and a staggering 70% below the prior four-week average. This data point overshadowed the supportive effect of a weaker dollar, dragging the ICE cotton December contract down 0.72 cents to settle at 77.12 cents/lb.
Demand Signals Weaken
Looking at the structure of sales commitments, the demand weakness is not a fluke. Net sales of current-season US cotton to China stood at only 5,518 bales, while forward sales for the 2026/27 season to China were zero. As the world's largest cotton consumer and importer, the absence of Chinese buyers removes a critical pillar of market support. Industry data shows that Chinese textile mills have significantly cooled their raw material purchasing intentions, with downstream order recovery falling short of expectations and high inventory pressure transmitting from the yarn segment upstream.
Meanwhile, US employment data also signaled economic cooling. The economy added only 57,000 nonfarm jobs in June, far below the 110,000 economists had forecast. Although the unemployment rate edged down to 4.2%, the overall weakness in the labor market implies insufficient momentum for end-use apparel consumption. For the entire cotton-textile chain, the demand transmission mechanism from consumer to raw material is tightening.
Price Range and Industry Dynamics
The view of Georgia-based cotton broker Keith Brown reflects the prevailing market expectation: short-term prices will oscillate within a 75-80 cents/lb range. This assessment rests on two core logics. First, after the deterioration in export data, the market needs time to digest the bearish news and find a new equilibrium. Second, the sharp decline in the US dollar index following the jobs report provides floor support for dollar-denominated cotton.
From the perspective of industrial clusters, inquiry and transaction activity for foreign cotton in China's main port bonded zones has already diverged. Some traders have begun lowering their basis to attract buyers, while textile mills prefer a hand-to-mouth purchasing strategy, unwilling to build substantial inventories when the price direction is unclear. This wait-and-see attitude in turn exacerbates the pressure on US cotton export data, creating a short-term negative feedback loop.
Notably, the US cotton market will reopen after the Independence Day holiday. If no new directional information emerges during the break, trading is likely to continue in a weak, range-bound pattern. For mills relying on imported cotton, whether the 77-cent level constitutes a temporary bottom will depend on subsequent US crop progress reports and the pace of China's quota issuance.