ICE cotton futures declined as market sentiment turned bearish due to an improved outlook for the U.
S. cotton crop and weak global demand. The benchmark contract posted a slight drop, continuing its downward trend over recent sessions, with analysts noting the market remains firmly range-bound.
Weather conditions in key cotton-growing areas of the United States, particularly in West Texas, have recently improved. This has supported expectations for a better-than-anticipated harvest, easing earlier concerns about tight supply. As a result, investor sentiment shifted, putting pressure on futures prices.
Adding to the bearish tone, export demand for U.
S. cotton remains sluggish. Recent data from the U.S. Department of Agriculture (USDA) indicated weak overseas sales, particularly for the upcoming 2025-26 marketing year. New crop sales were modest, and major buyers like China showed only limited interest. This decline in export activity has reduced bullish momentum and highlighted broader concerns about global cotton consumption.
Meanwhile, macroeconomic factors are also influencing cotton prices. A firmer U.S. dollar has made American cotton more expensive for overseas buyers. Simultaneously, lower crude oil prices have driven down the cost of polyester, a competing synthetic fiber, further dampening demand for natural cotton.
In terms of technicals, trading volumes have remained moderate, with futures holding within a narrow range. Analysts suggest that without a fresh catalyst, such as a sharp change in weather patterns, unexpected policy shifts, or a surge in demand—the market is likely to stay subdued.
Looking ahead, traders are closely watching upcoming USDA export sales and crop progress reports for clearer direction. For now, the cotton market remains caught between promising supply conditions and persistent demand-side uncertainty.
