ICE cotton futures extended their rally for a second consecutive session on Monday, with the benchmark December 2026 contract settling at 85.48 cents per pound, up 0.68 cent and marking a fresh three-month high. The gains were driven by mounting concerns over the US crop, strong demand signals from China, and a weaker US dollar that made American cotton more attractive to overseas buyers.
Other actively traded contracts also closed higher, gaining between 16 and 68 points across the board. Analysts said the December contract has now decisively cleared the 84-85 cent resistance zone, an improvement in the market’s technical structure that could open the door to further gains in the sessions ahead as bullish momentum builds.
Trading volume and open interest both confirmed the bullish tone. Futures volume climbed to 43,938 contracts, up from 36,423 in the prior session, while open interest rose by 3,321 contracts to 354,763, marking the eleventh consecutive increase. Market watchers said the combination of rising prices, expanding open interest and improving volume points to fresh buying rather than short covering alone, a sign of genuine conviction among participants entering the market.
Supply-side pressures added further support to prices. US crop conditions deteriorated, with the Good-to-Excellent rating slipping to 38 per cent, as hot, dry weather across West Texas continued to threaten yields in one of the country’s most important cotton-growing regions. Meanwhile, China’s state reserve sale recorded its 21st consecutive fully sold-out auction, underscoring persistently strong domestic demand even as ICE certified stocks fell to 72,626 bales, tightening available supply further and reinforcing the tight-market narrative.
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The broader cotton and cotton yarn market remained firm to bullish, underpinned by constrained global supplies, strong domestic and export demand, and healthy spinning capacity bookings across major producing regions. With fresh crop arrivals not expected until October or November, market participants said prices are likely to remain supported in the near term as buyers compete for limited available stock.
Polyester fibre prices also edged higher amid continued volatility in crude oil markets, adding to cost pressures across the broader yarn segment. Yarn markets overall maintained their strength, reflecting the tight cotton supply backdrop and sustained buying interest from spinners and downstream manufacturers navigating a firmer input-cost environment.
Taken together, the data pointed to a cotton market where tight supply and firm demand are reinforcing each other. The West Texas crop outlook and the pace of China’s reserve depletion are likely to remain the key variables shaping price direction as the market heads into the fourth quarter, with traders watching closely for any signs of relief on either front before fresh crop supplies begin arriving later in the year.