For the week ending July 16, U.S. cotton spot prices averaged 73.97 cents/lb, up 99 points from the prior week, while spot trading volume plummeted to just 604 bales—a 65% drop from the prior week's 1,732 bales and an 83% decline from the 3,582 bales traded in the same week last year.
This 'price up, volume down' pattern signals a growing disconnect between seller expectations and buyer willingness to transact at current levels. The market is in a wait-and-see mode, with buyers holding back and sellers betting on weather and yield narratives to sustain prices.
Futures vs. Spot: Diverging Signals
The daily spot price range for the week was 72.37 cents (July 16) to 74.95 cents (July 15), while the most-active ICE December futures contract settled at 79.30 cents/lb on Thursday—a premium of about 5.5 cents over the spot average. This widening futures premium reflects growing concern about future supply, but the anemic spot volume suggests that concern hasn't yet translated into actual procurement.
Season-to-date (since August 1, 2025), total spot cotton volume reached 1.522 million bales, up 54% from 987,565 bales in the same period last year. This indicates strong demand earlier in the marketing year, but the pace has clearly slowed in mid-July. Mills are balancing raw cotton inventories against slow-to-moderate finished product orders, adopting a cautious stance.
Weather: A Double-Edged Sword
Major cotton-growing regions in the Southeast and Southwest received widespread rainfall during the week, alleviating drought conditions. Alabama, Georgia, and the Florida Panhandle got 0.5-2 inches, with localized totals reaching 3 inches. According to the U.S. Drought Monitor, this rainfall halted or slowed the deterioration of drought conditions, and crop progress—especially squaring—remains on track.
However, rain also brought new challenges. Stinkbug populations have surged in central and southern Texas, with agricultural extension agents recommending treatment. Boll damage has been reported in the Coastal Bend area. In Kansas and Oklahoma, while rainfall provided much-needed moisture for dryland fields, some areas suffered wind damage and ponding, and square shedding has been reported.
Crop progress data from NASS (July 13) shows Georgia cotton at 78% squaring and Alabama at 76%; boll-setting is at 34% in Alabama and 20% in Georgia. Overall crop condition ratings are mostly 'good,' but growers face increasingly complex management demands—single spray passes now often combine fertilizer, herbicide, insecticide, and plant growth regulators.
Downstream Demand: Far East Inquiries, But Few Deals
Domestic mill buyers have been making moderate inquiries for cotton delivered October-December 2026, specifying color grade 42 or better, leaf grade 4 or better, and staple length 35 or better. However, no actual sales or additional inquiries were reported. Export demand is moderate, with Far East agents seeking any discounted varieties. Buyers from South Korea, Pakistan, and Peru showed the highest relative interest, but overall inquiry volume remains low.
This 'more inquiries, fewer deals' dynamic reflects slow-to-moderate downstream product demand. Mills are reluctant to build inventories at elevated prices, preferring to wait for clearer yield signals or a price pullback.