Cotton Futures Ease as Weekly Export Shipments Hit Marketing-Year Low

Cotton contracts finished lower on Monday, extending a cautious tone that has prevailed through much of December trading. Prices slipped between 1 and 14 points across the actively traded months, with the March 2026 contract settling at 63.61 cents per pound, down 14 points. May 2026 ended at 64.78 cents, a 6-point decline, while July 2026 closed fractionally softer at 65.85 cents, off 1 point.

The retreat in cotton came as other key market indicators moved in mixed directions. Front-month crude oil futures added $1.43 to $57.95 per barrel, while the U.S. Dollar Index softened by 0.317 points to 97.935. A weaker dollar can improve the competitiveness of U.S. cotton abroad, yet Monday’s currency move was not enough to offset selling pressure in the fiber market.

Fresh demand signals offered a nuanced picture. The U.S. Department of Agriculture’s weekly Export Sales report showed net sales of 153,266 running bales for the week ended Dec. 4. Although that volume marked a three-week high, it remained 10.19 percent below sales reported during the same week last marketing year. Export shipments told a weaker story, reaching just 101,577 running bales— the smallest weekly total so far in the 2025/26 season. Slower physical movement underscores lingering logistical challenges and cautious buying patterns from key importers.

Domestic cash activity was similarly subdued. An online auction conducted by The Seam on Dec. 19 recorded the sale of 18,183 bales at an average price of 59.38 cents per pound. The regional benchmark Cotlook A Index, which tracks world values on a free-on-board basis, held steady the same day at 73.30 cents, signaling limited directional impetus from the global cash market.

Inventory levels at the futures exchange remained unchanged. Intercontinental Exchange (ICE) certified stocks stood at 12,396 bales as of Friday, reflecting no new cotton tendered for certification and no withdrawals. Stable inventories, alongside modest daily volume, suggest participants are waiting for clearer demand cues before committing to new positions.

The USDA updated its Adjusted World Price on Thursday, trimming the figure by 40 points to 49.99 cents per pound. The adjustment, calculated to reflect global market conditions and U.S. quality differentials, can influence redemption decisions under various government loan programs. A lower benchmark narrows spot-to-loan spreads, potentially encouraging producers to postpone sales, though the impact often varies by region and individual cash-flow needs.

While cotton futures edged lower, outside agricultural markets offered contrasting signals. Coffee futures rallied on concerns over below-normal rainfall in Brazil, a key arabica producer. Corn, soybean and wheat prices, however, continued to search for support amid abundant inventories and sluggish export demand. Cross-commodity dynamics can influence speculative flows, and some traders monitor energy and grain complexes for cues on macro-fund sentiment.

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Market participants are also weighing the broader economic outlook. Risk appetite has been tempered by uncertainty surrounding global growth, interest-rate paths and currency fluctuations. A softer dollar typically bolsters U.S. export prospects, but Monday’s modest pullback in the greenback did little to spark large-scale buying of U.S. cotton.

Looking ahead, traders will focus on upcoming U.S. weekly export data, progress in Southern Hemisphere crops and any changes in energy prices, which can affect global freight and production costs. Weather developments in key consuming regions, particularly in South Asia and East Asia, remain on watch lists for signals on mill demand and shipping schedules.

The article’s source noted that, at the time of publication, the author held no direct or indirect positions in the securities mentioned. All figures are presented for informational purposes, and the original pricing data were supplied by Barchart.com.

Crédito da imagem: Marina Ermakova / Unsplash