Cotton Futures at Over 2-Month High

Cotton futures rose above 71 cents per pound, hitting the highest since October 2024, largely driven by firmer oil prices amid renewed concerns over a prolonged Iran war. US President Trump, in a televised address, provided few details on resolving the conflict and pledged further military action against Iran, stoking fears of lasting oil supply disruptions. Rising crude oil prices make cotton’s substitute, polyester, less affordable, boosting demand for cotton. At the same time, the International Cotton Advisory Committee (ICAC) projects global cotton production to decline 4% to 24.9 million tonnes in 2026-27, while consumption is expected to hold steady at about 25 million tonnes. The projected decline in cotton output reflects lower prices, softening demand, and cutbacks in plantings among leading producers, including Brazil and Australia, with US farmers reallocating acreage to corn and soybeans.

Cotton futures fell slightly to below 70 cents per pound, amid profit booking after a recent rally and tracking weakness in the grain market. Falling crude oil prices, driven by hopes for a swift resolution to the Iran war, improved the affordability of polyester, reducing demand for cotton. Meanwhile, the USDA’s prospective planting report, released on March 31, indicated US farmers are expected to plant more cotton in 2026, with acreage projected to rise 4% to 9.64 million acres from 9.28 million acres last year. Investors were monitoring US weather, particularly Texas rainfall, and overall planting progress while awaiting further clarity on the crop outlook. In the meantime, StoneX kept its 2025/26 Brazilian cotton production forecast at 3.74 million tons, but raised expected exports for 2026 to 3.1 million tons.

Cotton increased to 70.42 USd/Lbs, the highest since May 2025. Over the past 4 weeks, Cotton gained 8.75%, and in the last 12 months, it increased 5.13%.