US cotton spot markets are witnessing a classic price-volume divergence. For the week ending July 9, the average price for base quality cotton across seven designated markets surged 347 points to 72.98 cents/lb, while weekly volume plummeted to 1,732 bales, half of the prior week's 3,865 bales.
Price Jump Meets Volume Drop
Intra-week volatility was pronounced. The quote hit a low of 71.11 cents/lb on Monday, July 6, before jumping to 74.10 cents on Tuesday—the highest since June 2. ICE December cotton futures rose 3.8% on Tuesday and closed Thursday marginally lower at 80.63 cents/lb, remaining in a strong range.
High prices have clearly curbed demand. The week's 1,732 bales were also below last year's 2,739 bales for the same period. However, cumulative spot sales for the current marketing year (starting August 1, 2025) reached 1.522 million bales, 1.5 times the 984,000 bales a year earlier, indicating strong underlying annual demand.
Regional Disparities and Weather Woes
In the Southeast, trading was light but prices rose. Alabama and Georgia reported squaring rates of 64% and 63% respectively, with boll-setting at 14%-22%. Crop ratings were mostly good. Mills inquired about high-quality cotton (color 42+, leaf 4+, staple 35+) for Q3-Q4 2026 delivery but no trades were confirmed. Yarn demand was slow to moderate.
In the Southwest, East and South Texas saw virtually no trading. Crops are growing under heat stress and need more rain. The Lower Rio Grande Valley has open bolls and high whitefly pressure. West Texas, Kansas, and Oklahoma reported slow trading. Daytime highs reached 95-102°F, with scattered rain but widespread dryness. Some fields suffered hail and wind damage.
Export Inquiry and Price Structure
Export demand was moderate, with Far East agents inquiring for discounted cotton. India, Pakistan, and Vietnam led inquiries, but overall offshore buying was limited. Actual trades concentrated on specific grades: uniform bales (grade 31+, staple 34-38, micronaire 37-49) traded at 72.75-73.00 cents/lb FOB, while mixed bales (grade 13+, leaf 5+) traded at 68.00-70.00 cents/lb.
Implications for the Supply Chain
Higher US cotton prices are squeezing downstream spinners' margins. Domestic mills are reluctant to commit at current levels. For exporters, the rally may push buyers in Southeast Asia and China to seek alternatives or increase polyester blends. Yet the doubled annual volume signals that global supply-demand tightness remains intact, providing underlying price support.