ICE cotton futures paused after last week’s strong rally, with the December 2026 contract slipping 0.03 cent to 81.51 cents while holding most of its weekly gains.
Hot, dry weather in West Texas and declining US crop ratings supported prices despite bearish USDA WASDE estimates.
Higher crude oil prices and lower ICE certified stocks also underpinned the market.
Trading activity remained subdued, with analysts focusing primarily on hot and dry weather across key US cotton-growing regions, particularly the Southwest and West Texas, where prolonged heat could negatively affect crop development during the critical growing stage.
Market analysts said the ongoing hot and dry conditions in the Southwest Plains, especially West Texas, remain the market’s primary bullish factor. West Texas is the largest cotton-producing region in the United States, making its weather especially important for production prospects.
The latest USDA Crop Progress Report showed that 44 per cent of the US cotton crop was rated good-to-excellent, down from 46 per cent the previous week and 54 per cent a year earlier, reflecting continued deterioration in crop conditions.
Trading volume increased to 59,297 contracts from 54,824 contracts in the previous session, while the average daily trading volume last week stood at 55,791 contracts, indicating steady market participation despite limited fresh cotton-specific news.
Traders continued to assess the USDA’s July WASDE Report, which projected 2026-27 US cotton production at 13.70 million bales, US ending stocks at 4.10 million bales, and global ending stocks increasing by 300,000 bales. Despite the slightly bearish supply revisions, the market remained focused on weather rather than the report.
The US Dollar Index strengthened slightly, but analysts noted that the move had little impact on cotton prices. However, a stronger dollar generally reduces the competitiveness of US cotton exports in international markets.
CBOT soybean and corn futures closed slightly higher, supported by continued concerns over hot and dry weather across parts of the US Midwest.
Crude oil surged about 9 per cent, reaching its highest close in nearly one month, following renewed military exchanges between the US and Iran, which escalated tensions around the Strait of Hormuz and raised concerns over global energy supplies. Higher crude oil prices supported cotton by increasing polyester production costs, thereby improving cotton’s relative price competitiveness against synthetic fibres.
Broader financial markets were mixed, with gold falling 2.6 per cent, silver declining 3.6 per cent, grain markets remaining mostly unchanged, and all three major US equity indices closing lower ahead of key US inflation data and Federal Reserve testimony.
Market participants are now focused on the upcoming US June CPI inflation report and Federal Reserve Chair Kevin Warsh’s congressional testimony, both of which could influence interest rate expectations, the US dollar, and overall commodity market sentiment.
ICE certified cotton stocks as of July 10 declined further to 127,127 bales from 158,607 bales previously, reflecting another significant reduction in deliverable supplies.
This morning (Indian Standard Time), ICE cotton for December 2026 traded at 81.76 cents per pound (up 0.25 cent), cash cotton at 75.83 cents (down 0.09 cent), October 2026 at 80.28 cents (up 0.45 cent), March 2027 at 83.16 cents (up 0.22 cent), May 2027 at 83.99 cents (up 0.25 cent), and July 2027 at 83.32 cents (up 0.16 cent). A few contracts remained at their previous closing levels, with no trades recorded so far today.
Fibre2Fashion News Desk (KUL)
