Cotton Extends Gains on Weather Concerns

Cotton increased to 86.77 USd/Lbs, the highest since May 2026. Over the past 4 weeks, Cotton gained 9.81%, and in the last 12 months, it increased 30.34%.

Cotton futures traded above 86.3 cents per pound, approaching over a three-month high as crop conditions deteriorate. The latest USDA crop progress report showed conditions worsening to 38% rated good-to-excellent, down from 40% last week and 46% two weeks prior. Deteriorating weather across key producing regions, marked by drought and rising temperatures, raises the risk of lower yields and tighter global supplies, supporting prices. In Brazil, exports surged 19% in July. Meanwhile, El Niño conditions are projected to strengthen through September, keeping temperatures elevated and threatening yields. In India, plantings have largely recovered following normal July rains that offset a dry June, though August and September precipitation remains critical for final output. Still, the rally has left cotton vulnerable to profit-taking as traders lock in gains.

Cotton futures traded near 84 cents per pound, after reaching a three-month high of 84.5 cents, as adverse weather in key producing regions fueled supply concerns. The USDA’s latest crop progress report showed 42% of the US cotton crop was rated good to excellent, down from 46% a week earlier and 55% a year ago. Cotton is entering a critical stage of the growing season, while triple-digit temperatures and limited rainfall threaten both dryland and irrigated fields. In India, below-average monsoon rainfall is expected to persist through August, raising concerns over yields. Meanwhile, Brazil’s cotton production is projected to decline as El Niño-related dryness intensifies through September. On the demand side, China barred domestic entities from doing business with six US cotton-linked firms following Washington’s addition of 43 Chinese companies to its forced-labor import restriction list. Still, the rally has left cotton vulnerable to profit-taking as traders lock in gains.