US Cotton Exports Plunge Shakes Market, 75-80 Cents Range Becomes Short-Term Barometer

The 75 cents/lb threshold is under threat again. On July 2, the ICE December cotton futures contract fell 0.92% to close at 77.12 cents/lb. Although the weekly gain was a marginal 0.97%, market sentiment has been completely reversed by a dismal export sales report. The USDA's latest weekly report showed that for the week ending June 25, current-year upland cotton net sales were only 49,001 bales, down 42% from the previous week and a staggering 70% below the four-week average. More alarmingly, sales to China were just 5,518 bales, with next-year sales to China at zero. This data directly exposes a sharp contraction in purchasing intent from the world's largest cotton consumer. From an industrial transmission perspective, the absence of Chinese buyers is not an isolated event. Downstream textile enterprises are generally facing order shortages and finished product inventory buildup, directly suppressing demand for raw material replenishment. For cotton merchants, this means the short-term hope of demand driven by China is fading. On the same day, the US June employment data came in far below expectations, with only 57,000 new jobs added, causing the dollar index to fall sharply. Theoretically, a weaker dollar should benefit dollar-denominated cotton exports, but weak demand fundamentals completely suppressed this macro positive. The implication for textile enterprises is that the dominant factor in cotton prices has shifted from macro to industry. Buyers should not change their judgment on supply and demand fundamentals due to short-term dollar fluctuations. The 75-80 cents/lb trading range is precisely the result of the tug-of-war between industrial supply and demand. For US cotton-producing regions, slowing export sales mean rising inventory pressure. Merchants in Georgia have clearly stated that prices will operate in the 75-80 cents range in the near term. This judgment is based on the dual constraints of cost support and weak demand: below 75 cents will trigger farmer hoarding, while above 80 cents lacks demand support. For international buyers, the current range provides a relatively stable pricing environment. However, caution is needed: if Chinese orders remain sluggish, prices could test the 75 cents support level.