Cotton Futures Edge Lower

Cotton futures eased toward 81 cents per pound, pressured by the US dollar's strength and lower crude oil prices, which enhance polyester competitiveness and weigh on cotton demand. Expectations of rainfall across the US cotton belt also added to the downside pressure. On the supply side, conditions remained mostly favourable for planting and early crop development, with Vaisala Weather analysis indicating supportive soil moisture across the Delta and Southeast cotton belt, aiding crop emergence. Forecasts showed chances of rainfall in Southwest Texas and nearby dry regions, reducing the risk of crop damage. Meanwhile, the latest US weekly crop progress report showed US cotton reached 41% as of May 17, up from 29% a week earlier and slightly above the five-year average of 40%. Lastly, ICE-certified cotton stocks increased sharply to 203,491 bales on May 18, compared to 193,438 bales the previous day, indicating improved deliverable supply availability.

Cotton futures rose above 82 cents per pound, up from two-week lows of 80.6 cents per pound hit on May 15, supported by a weaker US dollar and elevated oil prices. At the same time, the White House said that China has committed to purchasing at least $17 billion worth of US agricultural products annually between 2026 and 2028, which boosted hopes for stronger export demand. The latest USDA's weekly export sales report signaled weakening demand. with sales falling 27.5% year-on-year to 47,699 bales and shipments dropping to an eight-week low of 290,293 bales. On the supply side, the market is closely watching US planting progress amid prolonged dry conditions in key producing states like Texas. US cotton production for 2026/27 is projected at 13.3 million bales, down 600,000 bales from 2025/26, according to the USDA’s May WASDE report. The same report also points to lower global production and ending stocks for 2026/27, alongside higher consumption, signaling tighter global supplies.

Cotton futures dropped over 4% to near 83.3 cents per pound, the lowest in a week, as traders weighed the lack of agricultural announcements from the US-China summit and signs of weakening demand. The latest US weekly export sales report showed net sales of Upland cotton totaling 47,700 running bales for 2025/26, a marketing-year low, down from 61% in the previous week and 66% from the prior four-week average. Meanwhile, the USDA’s May WASDE report showed that the 2025/26 global balance sheet was revised upward, with higher estimates for production, consumption, and both beginning and ending stocks. Global production was raised nearly 1% to 122.6 million bales, with the 2026/27 production seen at 116.04 million bales. US all-cotton production for 2025/26 was reduced by 21,000 bales to 13.90 million, while 2026/27 output was projected at 13.30 million bales.