69.51 cents per pound—that was the average spot price for base-quality cotton across seven designated US markets in the week ending July 2, down 133 points from the previous week but still 4.32 cents above last year. The ICE December contract also fell 0.72 cents to 77.12 cents per pound.
On the surface, this looks like a seasonal correction, but the signals beneath are far more complex. Cumulative spot sales for the 2025/26 marketing year (starting August 1) have reached 1.52 million bales, surging about 55% year-on-year. Yet regional trading remained thin, with supply and mill offers at moderate levels and demand limited to a few foreign textile mills, mainly in Bangladesh and Turkey.
Diverging Weather Patterns Across Growing Regions
The Southeast region was rated mostly "good," but rainfall was uneven. Alabama's squaring rate reached 53% and boll-setting 13%; Georgia's squaring rate was 46% and boll-setting 8%. While parts of eastern Carolinas and coastal Virginia received 0.5 to 1 inch of rain, these areas had been suffering severe to extreme drought, and more rain is needed soon to support seedling growth.
The Southwest region faced more extreme conditions. East Texas saw daytime highs of 95–99°F with no rain; South Texas remained sunny and windy, with early-planted fields entering the sixth week of bloom and lower Rio Grande Valley bolls beginning to crack. West Texas experienced 99–105°F temperatures, with scattered thunderstorms bringing trace to 3 inches of rain, but also 110 mph winds and hail that damaged some seedlings. Kansas reported strong winds hindering crop progress, while Oklahoma faced high weed pressure and ongoing pest monitoring.
This weather divergence means early-planted areas may harvest ahead of schedule, but late-planted fields face yield risks, creating uncertainty in final production estimates. For Chinese mills relying on US cotton, this directly impacts landed costs and quality consistency in the coming months.
Price Transmission and Procurement Window
Although spot prices are up year-on-year, the weekly decline of 1.9% and the concurrent drop in ICE futures suggest near-term pressure. Historically, July often marks a low point for US cotton prices, as old-crop inventory pressure and weather speculation alternate before new-crop arrivals.
Two structural shifts deserve attention. First, spot sales volume surged 55% YoY, indicating that downstream demand is not weak—but buying has become more cautious. Second, demand is heavily concentrated in a few countries like Bangladesh and Turkey. Once these buyers complete their phased replenishment, prices could soften further.
For Chinese buyers, the current 69–70 cents/lb spot price is approaching the cost line for some mills. If the RMB exchange rate remains stable, the price gap between imported cotton and Xinjiang cotton may narrow, making imported cotton more cost-competitive again. It is advisable to closely watch the July USDA supply-demand report for any adjustments to US cotton production and monitor weather developments in key growing regions.