Cotton Futures at 2024-Highs

Cotton futures approached 72 cents per pound, the highest level since October 2024, supported by supply concerns in key US regions and a weaker dollar boosting export appeal. Continued dry weather conditions across the US western and southwestern Great Plains remain a critical concern for the upcoming crop, despite recent data showing a larger-than-expected intended cotton area. In the meantime, Brazil’s export data (Secex) showed that March cotton exports jumped 45% year-on-year to 347,822.83 tons compared to around 239,000 tons last year. Gains were capped by falling crude oil prices amid the US-Iran ceasefire, which lowered polyester production costs, reducing cotton’s appeal.

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.