ICE cotton futures surged amid technical and bargain buying, bolstered by a weaker US dollar and upbeat export demand. The May 2025 contract jumped approximately 4.15%, settling near 65.99 ¢/lb—driven partly by short-covering and renewed interest from major importers like Vietnam. Additional momentum came from improved US export sentiment and favorable crude oil trends, which elevated polyester costs and indirectly supported cotton prices.
The USDA’s February WASDE report lifted the global cotton production outlook by 500,000 bales, raising the 2024/25 forecast to 121.0 million and boosting mill-use by 595,000 bales to 116.5 million. China’s output was revised upward by 750,000 bales to 31.8 million, while Pakistan’s estimate fell by 200,000 bales to 5.0 million. Meanwhile, US production remained unchanged at 14.4 million bales, but ending stocks rose to 4.9 million. Looking forward to the 2025/26 season, USDA anticipates a slight contraction in global output (116.7 million bales) accompanied by increased mill-use (119.0 million) and trade volumes (46.0 million). Despite a stronger global supply, supportive fundamentals—such as a weaker dollar, rising oil prices, and robust export interest—continue to underpin cotton prices. Speculative demand remains high amid these dynamics.
In summary, cotton markets are responding to a unique convergence of macroeconomic, trade, and fundamental supply-demand forces. Technical buying, favorable currency shifts, and improved export forecasts, chiefly grounded in USDA revisions—are collectively lifting prices in the short term, though long-term balance remains influenced by global production trends and demand.
