Cotton Trades at October 2024 Highs

Cotton futures surged past 71.6 cents per pound, reaching their highest level since late 2024 as market participants weigh a tightening global supply outlook against recent domestic planting data. Although the market experienced a brief sharp decline following the surprise acreage report it quickly recovered as traders shifted focus back to the prospect of a thinner global balance for the 2026-27 season. Actual acreage often deviates from early government estimates and this uncertainty is compounded by confirmed production cuts in other major producing nations such as Brazil, China and Australia. Higher crude oil prices resulting from the ongoing conflict in Iran continue to provide underlying support for cotton by increasing the cost of synthetic polyester alternatives.

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.