Cotton Futures at Near 2-Year High

Cotton futures traded around 86.6 cents per pound, holding close to the highest since April 2024, mainly supported by elevated oil prices amid ongoing geopolitical tensions. Higher crude oil prices push up polyester production costs, making cotton a more attractive substitute and thereby supporting cotton demand. Meanwhile, attention remains on weather conditions in key US growing regions. Texas, the main cotton belt, continues to experience dry conditions, although isolated rain showers are expected across parts of the Delta and Southeast cotton-growing areas. Elsewhere, Brazilian cotton exports jumped nearly 55% year-on-year to 370,400 tons in April, the highest volume ever recorded for the month, which normally sees lower volumes due to the off-season, reflecting the country's growing role as a global supplier.

Cotton increased to 81.82 USd/Lbs, the highest since May 2024. Over the past 4 weeks, Cotton gained 16.76%, and in the last 12 months, it increased 24.74%.

Cotton futures traded around 83 cents per pound, close to the highest since April 2024, mainly supported by elevated oil prices amid the ongoing Middle East disruptions and stalled US-Iran peace talks. Higher crude oil prices increase polyester production costs, which in turn support cotton prices as a natural substitute. At the same time, drought risks persisted across key US growing regions, particularly West Texas, partly offset by better conditions in the Delta and Southeast US. Meanwhile, demand prospects softened following weak US export sales. The latest USDA's weekly export sales report showed net sales of Upland totaling 119,900 running bales for 2025/26, down 26% from the previous week and 55% below the four-week average.