Cotton Futures Hover Around 1-Week Highs

Cotton futures traded around 65.2 cents per pound, holding close to recent one-week highs, supported by firmer crude oil prices amid the Middle East crisis. Meanwhile, market participants assessed the outlook for supply and demand. The US Department of Agriculture, in its March 2026 WASDE report, projected higher global cotton production and ending stocks for the 2025–26 season while slightly lowering consumption. The production forecast was raised by over 1.1 million bales to 120.99 million bales, up from the USDA’s February 2026 estimate of 119.86 million bales, reflecting larger crops in Brazil and China. The world consumption forecast is down 140,000 bales, with mill use projected lower in several countries, partially offset by higher consumption in China.

Cotton futures advanced toward 64.5 cents per pound, the highest in a week, driven in part by rising oil prices, which make cotton-substitute polyester more expensive. Meanwhile, the latest USDA export sales report showed 150,362 running bales sold in the week ending February 26, down 40.6% from the previous week and 9.9% below the same week last year. In its March report, the International Cotton Advisory Committee (ICAC) projected global cotton production for 2026/27 to fall about 4% to 24.8 million tons, while global consumption is expected near 25 million tons, pointing to a slightly tighter market. Traders now await the March WASDE report for further insights into the global supply and demand outlook for the natural fiber.

Cotton futures traded around 64 cents per pound, reaching the lowest since February 18 and pulling away from a six-month peak of 66 cents per pound hit on February 25. A stronger US dollar, supported by rising Middle East tensions, has made US cotton costlier for foreign buyers, reducing export demand and pressuring prices. In the meantime, the latest USDA export sales report for the week ended February 19 showed cotton export sales for the current marketing year stood at 253,200 running bales, down from 466,300 running bales in the week ended February 12. Meanwhile, the USDA in its February WASDE report raised its forecast for 2025/26 global cotton production by 425,000 bales from January to 119.86 million bales, alongside a 200,000-bale reduction in consumption. However, surging oil prices helped limit further losses, providing some support to the market.