Cotton Futures Move Lower

Cotton futures have been gradually easing to near 67 cents per pound, pulling away from nine-month highs of nearly 69 cents per pound hit on March 17. A firmer dollar, technical adjustments and signs of mild demand weighed on prices. Buyer sentiment remained cautious, with importers adopting a wait-and-watch approach amid uncertain price direction. Geopolitical risks, notably from the US–Iran conflict, and associated fears of shipment disruptions and elevated energy and transport costs have heightened market caution. Reflecting this, the latest USDA's weekly exports sales report showed US cotton export sales softened in the week ended March 12, after the previous week’s rebound, while shipments eased from peak levels but remained higher than average. In the meantime, ICE certified stocks declined to 115,640 bales as of March 18, offering some support from underlying supply tightness.

Cotton futures extended their upward momentum to cross 69 cents per pound, the highest level since April 2025, helped by a subdued US dollar, rising oil prices and speculators covering short positions. Meanwhile, traders weighed the outlook for demand and supply. According to the latest USDA's weekly export sales report, net sales of upland cotton for the current marketing year totalled 253,200 running bales in the week ended March 5, up 68% from the prior week. News of China’s willingness to expand purchases of US agricultural products also boosted market prospects. On the supply side, reports indicated weather conditions in the US cotton belt look challenging in the near term. Currently, 88% of the region is experiencing drought, with record-high temperatures recorded in March and very low precipitation. On the other hand, StoneX has raised its estimate for Brazil's total cotton supply in 2026 to 3.74 million tons, primarily reflecting the good development of crops in Bahia.

Cotton increased to 66.57 USd/Lbs, the highest since August 2025. Over the past 4 weeks, Cotton gained 3.96%, and in the last 12 months, it decreased 1.15%.