A sudden chill in U.S. cotton export data has dealt a cold blow to the recently stabilized international cotton prices. The latest USDA weekly export sales report shows that for the week ending June 25, total net sales of U.S. upland cotton reached 93,118 bales, with current marketing year net sales of 49,001 bales, down 42% from the previous week and a sharp 70% decline from the prior four-week average. Net sales for the next marketing year were 44,117 bales, with zero net sales to China. This data overwhelmed the supportive effect of a weakening U.S. dollar, sending the ICE cotton futures contract for December down 0.72 cents to settle at 77.12 cents per pound, a decline of 0.92%.
Behind the Export Weakness: China's Slowing Procurement Pace
Net sales to China for the current marketing year were a mere 5,518 bales, far below market expectations. For the next marketing year, net sales to China were zero. This is not an isolated incident but a microcosm of the cautious shift in raw material procurement strategies by Chinese textile enterprises. Since the second half of 2025, the Chinese cotton textile chain has been under dual pressure from sluggish growth in end-order demand and high finished product inventories, leading to an overall weakening in cotton demand. Simultaneously, the domestic cotton market is well-supplied, with high stocks of Xinjiang cotton and imported cotton, diminishing the immediate need for U.S. cotton procurement.
Furthermore, ongoing uncertainties in Sino-U.S. trade relations continue to dampen the signing of forward contracts. Although high-level dialogues between the two countries remain smooth, there have been no substantial changes in tariff policies or quota management. Importers tend to favor a 'short order, small batch, fast turnaround' procurement model to avoid excessive exposure in long-term contracts.
Dollar Weakness Fails to Reverse the Trend: A Macro-Industry Logic Mismatch
The same day saw disappointing U.S. June employment data—only 57,000 new jobs were added, far below the expected 110,000. While the unemployment rate fell from 4.3% to 4.2%, structural employment issues persist, with the labor force participation rate remaining low. This triggered a sharp decline in the U.S. dollar index, which theoretically should support dollar-denominated cotton prices.
However, the bearish force from the industrial side proved stronger. Export data directly reflects the decline in actual demand, and the price elasticity brought by macro-monetary factors appears pale against the weak fundamentals. This reminds market participants that in the current deep adjustment of the textile and apparel supply chain, supply-demand fundamentals are the core anchor for pricing, while peripheral variables like exchange rates and crude oil only cause short-term disturbances.
The 75-80 Cent Trading Range: A Battle Between Industrial Logic and Market Expectations
Cotton broker Keith Brown from Georgia clearly stated that cotton prices are likely to oscillate within the 75-80 cent per pound range in the near term. This judgment is based on two points: first, the current level of 77 cents is close to the production cost for some U.S. cotton farmers, and further declines could trigger farmer hoarding and acreage adjustment expectations, providing downside support. Second, the 80-cent level faces pressure from weakened buying interest from major consumers like China and Vietnam, and there is no clear signal of a substantial recovery in global textile end-demand.
For textile enterprises, this range means manageable raw material costs, but they must also be wary of a price breakout. Any adverse weather in major U.S. cotton-producing regions or the announcement of new Chinese cotton import quotas could disrupt the current equilibrium.