Cotton Shows Continued Weakness in Early Friday Hours
In the recent trading session, cotton futures for October 2025, December 2025, and March 2026 have shown a consistent downward trend. As of the current market, the prices stand at 64.42, 66.36, and 67.69 cents per pound respectively [1].
The decline in cotton prices began early on Friday, with a drop of 38 to 40 points [2]. This follows a similar trend on the previous day, where cotton futures closed out the Thursday session with contracts down 24 to 29 points [3].
One of the key factors contributing to this downward pressure is the increased net short positions taken by speculators in cotton futures and options [4]. According to the Commitment of Traders data, these short positions have risen significantly, reaching over 40,000 contracts by late July 2025.
Soft global demand and uncertainties surrounding trade policies and tariffs have also weakened market sentiment, further pressuring futures prices lower [3]. The USDA's projections for 2025 cotton acreage, while revised downward compared to earlier forecasts, remain relatively stable [3].
The US dollar index and crude oil futures price movements also impact cotton prices. A weaker dollar and lower crude oil prices have generally exerted downward pressure on cotton prices, although there was a brief rally in cotton prices when crude oil rose and the dollar strengthened in late July 2025 [2][4].
Physical cotton sales remain modest with stable certified stocks in ICE warehouses. Indices like the Cotlook A Index—an important global price benchmark—have declined recently, reinforcing the downtrend in futures [2][4].
Looking ahead, analysts and macroeconomic models forecast cotton prices to trend around 62.81 cents per pound by the end of the current quarter and potentially drift down to approximately 58.15 cents per pound over the next 12 months [1].
In terms of shipments, the top destination was Vietnam at 66,400 RB, followed by Turkey with 44,400 RB [5]. Thursday's Export Sales report indicated a total of 71,683 RB of new crop cotton sales [6].
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References:
[1] Cotton futures prices (CFTC) - https://www.cot.com/report/futurepositions
[2] Cotton futures and options prices (ICE) - https://www.theice.com/futures/cotton/prices
[3] USDA Cotton Acreage Projections - https://www.usda.gov/oce/cotton/acreage
[4] Commitment of Traders (COT) report - https://www.cftc.gov/marketreports/commitmentsoftraders/index.htm
[5] Cotton shipments data - https://www.usda.gov/oce/cotton/shipments
[6] Export Sales report - https://www.fas.usda.gov/data/export-sales-report
The concerning downward trend in cotton futures prices, as of the current market, coincides with an increase in net short positions by speculators, reaching over 40,000 contracts by late July 2025. Furthermore, soft global demand and trade uncertainties have also weakened market sentiment, potentially pressing futures prices lower.
