Cotton futures experienced a robust rally across all contracts on Thursday, with front-month contracts leading the charge, as the U.S. Department of Agriculture (USDA) announced significant reductions in its carryout projections for both old and new crop supplies. The market’s strong positive reaction underscored a tightening supply outlook, a key takeaway from the latest World Agricultural Supply and Demand Estimates (WASDE) report.
Gains ranged from 13 to 139 points across the board, signaling broad market optimism. Specifically, the July 2026 Cotton contract closed at 72.49 cents per pound, marking an impressive increase of 139 points. The December 2026 Cotton contract also saw substantial upward movement, closing at 76.36 cents per pound, up 106 points. Similarly, the March 2027 Cotton contract finished the day at 77.6 cents per pound, reflecting a gain of 100 points.
USDA’s WASDE Report: The Catalyst for Rally
The primary driver behind Thursday’s rally was the USDA’s WASDE data, which revealed a 200,000-bale cut to old crop stocks, bringing the total to 4.2 million bales. Concurrently, old crop exports were increased by 200,000 bales to 12.2 million bales, indicating stronger demand depleting existing inventories. The new crop outlook also saw a reduction of the same amount, with stocks now projected at 3.7 million bales.
The impact extended beyond domestic figures to the global market. World old crop stocks were reported down by 0.64 million bales, settling at 76.63 million bales. Furthermore, the new crop global carryout saw an even larger reduction, decreasing by 0.71 million bales to 71.13 million bales. These substantial cuts to both domestic and international supply projections provided a clear bullish signal to cotton traders, suggesting a tighter market balance than previously anticipated.
Strong Export Sales Bolster Demand Picture
Further supporting the positive market sentiment was the USDA’s Export Sales report, released Thursday morning, which highlighted robust demand for U.S. cotton. For the week ending June 4, a total of 207,032 running bales (RB) of cotton were sold for the 2025/26 marketing year. This figure represented a nine-week high, underscoring renewed international interest.
Vietnam emerged as the top buyer, securing 83,300 RB, while Pakistan followed with significant purchases totaling 57,300 RB. The report also detailed strong new crop sales, with 298,689 RB committed for future delivery, marking a marketing year high. Vietnam was again the dominant purchaser in this category, buying 180,000 RB.
Shipments were also robust, tallied at 300,114 RB, an increase from the previous week. Vietnam remained the leading destination for these shipments, receiving 109,200 RB, with Pakistan as the second-largest recipient at 49,400 RB. The consistent strength in both sales and shipments indicates healthy global demand for cotton, complementing the tighter supply narrative.
Broader Market Context and Other Cotton Metrics
In the broader commodity landscape, crude oil prices experienced a notable decline on Thursday, dropping $3.61 to $86.42 per barrel. This movement followed an announcement by President Trump late in the day regarding a deal between the United States and Iran, which typically signals potential increases in oil supply. The U.S. dollar index also saw a slight decrease, down $0.234 to $99.70, which can make dollar-denominated commodities more attractive to international buyers.
Other key indicators within the cotton market presented a mixed picture. The Seam, an online cotton trading platform, reported sales of 1,386 bales in Wednesday’s auction, with an average price of 71.63 cents per pound. The Cotlook A Index, a benchmark for international cotton prices, was down 225 points on June 10, settling at 83.65 cents. ICE certified cotton stocks, representing available physical supply, decreased by 38,894 bales on June 10, bringing the certified stocks level to 193,789 bales. The Adjusted World Price (AWP) also saw a decline, down another 194 points on Thursday to 61.26 cents per pound.
Despite some downward adjustments in specific indices and prices, the overarching sentiment in the cotton market on Thursday was dominated by the USDA’s supply-side revisions and the robust export figures. These factors collectively pointed towards a more constrained supply environment coupled with sustained demand, providing a strong foundation for the day’s significant futures rally.
