US Cotton Futures Sink on Strong Crop Outlook, Oil Weakness

ICE cotton futures weakened for the second straight session yesterday as expectations of a strong US harvest and lack of external market support pressured prices. The benchmark December 2025 contract closed at 66.71 cents per pound, down 0.61 cent, its lowest settlement since August 8. Other actively traded contracts also slipped between 35 and 59 cents.

The decline coincided with a more than one per cent drop in crude oil, which reduced cotton’s competitiveness against polyester fibre. Oil prices slid on concerns about the Ukraine conflict and potential Russian fuel supply disruptions, adding to the bearish tone for cotton.

Trading volume climbed to 34,862 contracts, compared with 29,805 in the previous session, as market participants questioned whether the key support level of 64.24 cents could hold. Analysts cautioned that with over half of the US crop now rated good to excellent by the USDA—up sharply from 40 per cent last year—prices may edge toward 60 cents if conditions continue to improve.

Mills have shown interest in new-crop US cotton, especially high grades at cheaper levels, though sellers reported adequate bookings and little urgency to chase the market lower.

Beyond cotton, US equities extended modest gains, with stock indexes moving near record highs. However, commodity markets broadly lagged equities as higher Treasury yields and President Donald Trump’s dismissal of a Federal Reserve governor reignited debate over central bank independence.

Grain markets ended mixed, with soybeans recovering some ground despite pressure from a bumper harvest.

As of the latest session, ICE December 2025 cotton traded at 66.77 cents per pound, while cash cotton was quoted at 64.22 cents. The October 2025 contract stood at 65.47 cents, March 2026 at 68.59 cents, May 2026 at 69.93 cents, and July 2026 at 70.70 cents, with a few contracts unchanged on the day. Market sentiment remains tilted bearish as traders brace for further downside risk.