Cotton futures concluded Thursday’s trading session mostly weaker, with significant losses observed across most contracts as the market prepared for the upcoming Juneteenth long weekend. While the July contract managed to retain a substantial weekly gain, daily trading saw declines ranging from 4 to 85 points, signaling a cautious sentiment among traders. This downturn occurred amidst broader commodity market movements, including a further dip in crude oil prices and a strengthening US dollar index, factors often influencing agricultural commodities.
Market Performance and Macroeconomic Influences
On Thursday, cotton futures experienced a notable retreat, with most contracts registering losses between 4 and 85 points. Specifically, the July 2026 cotton contract closed at 76.05 cents per pound, down 85 points. The December 2026 contract saw a 12-point decline to 79.67 cents, while the March 2027 contract fell by 4 points to 81.05 cents. Despite these daily losses, the July contract maintained a robust performance over the week, still up 311 points, according to market data.
The broader economic landscape also played a role in Thursday’s trading. Crude oil prices continued their downward trend, shedding another 17 cents per barrel to settle at $76.64. Concurrently, the US dollar index strengthened, rising by $0.710 to reach $100.800. A stronger dollar typically makes dollar-denominated commodities like cotton more expensive for international buyers, potentially dampening demand. The market and government will observe Juneteenth on Friday, leading to a holiday closure, with normal trading resuming Sunday night.
Export Sales Dynamics and Global Demand
Detailed insights into global cotton demand emerged from the USDA’s Export Sales report for the week ending June 11. The report indicated 2025/26 marketing year cotton sales totaling 177,098 running bales (RB). While this represented a three-week low, it was nearly triple the volume sold during the same week in 2025, highlighting a significant year-over-year increase in commitments. Pakistan emerged as the largest buyer in this category, securing 76,600 RB, followed by India with purchases of 39,600 RB.
New crop sales for the same week were tallied at 188,395 RB. This figure, though substantial, marked a decrease from the previous week’s marketing year high. Vietnam led the new crop purchases with 65,600 RB, and Pakistan also remained a key buyer, acquiring 39,600 RB. Furthermore, cotton shipments during the week reached 250,964 RB. This was the lowest shipment volume recorded since mid-February but still represented a 6.23% increase compared to the corresponding week in 2025. Vietnam was the primary destination for these shipments, receiving 66,300 RB, with Pakistan as the second-largest recipient at 33,100 RB.
Spot Market Activity and Index Movements
Activity in the physical cotton market, as reported by The Seam, showed 6,099 bales sold on June 17 at an average price of 74.41 cents per pound. This provides a snapshot of immediate demand and pricing in the spot market. Concurrently, the Cotlook A Index, a key international benchmark for raw cotton prices, recorded an increase of 100 points on Wednesday, reaching 86.50 cents. This upward movement in the Cotlook A Index suggests some underlying strength in global pricing perceptions despite the futures market’s daily decline.
Meanwhile, certified cotton stocks held by ICE (Intercontinental Exchange) saw a reduction, decreasing by 1,677 bales on June 17. The total certified stocks level stood at 191,022 bales. The Adjusted World Price (AWP), a crucial metric for U.S. cotton producers, also moved lower, declining by another 111 points on Thursday to 62.37 cents per pound. The AWP’s decline can impact loan deficiency payments and marketing loan gains for producers, reflecting a weaker underlying price environment.
The overall market sentiment, as indicated by recent commentary from industry observers, suggests a prevailing bearish outlook for cotton prices. Analysis published by Barchart, for instance, has highlighted that “The Bears Are in Control of Cotton Prices,” advising vigilance on key levels. Despite the July contract’s weekly resilience, the broad-based daily losses across other contracts, coupled with a strengthening dollar and falling crude oil, paint a picture of caution as traders head into the extended holiday weekend. The market’s reopening on Sunday night will provide the next opportunity to gauge the direction of cotton prices in the wake of these varied influences.
