Cotton Prices Remain Under Pressure as Weak Crude Oil and Slow US Harvest Progress Shape Market Outlook

US cotton futures recovered from earlier weakness but still finished lower, with contracts declining between 10 and 17 points. December 2026 cotton settled at 77.66 cents per pound, while March and May 2027 contracts both recorded 10-point losses.

The market is facing pressure from a sharp decline in crude oil prices, while the US dollar index also edged lower. Crop progress data shows that cotton boll opening remains slightly behind the five-year average, although harvesting is progressing close to its normal seasonal pace.

Physical market activity was limited, with only 219 bales reported sold through The Seam. Meanwhile, the Cotlook A Index strengthened and ICE certified stocks declined, providing some counterbalance to the weaker futures performance.

Cotton Market Snapshot

Current Cotton Price Action

Cotton futures moved back towards unchanged during the session but ultimately remained in negative territory.

December 2026 cotton closed at 77.66 cents per pound, down 17 points. March 2027 futures settled at 81.49 cents, losing 10 points, while May 2027 finished at 83.13 cents, also down 10 points.

The recovery from earlier weakness suggests that some buying interest emerged as the session progressed. However, the market was unable to turn positive.

One of the main external influences was the sharp decline in crude oil, which fell $7.86 per barrel. Lower energy prices can weigh on sentiment towards cotton through their influence on synthetic fibre costs, production expenses and broader commodity-market positioning.

The US dollar index also declined by 0.075, which may provide some support to the competitiveness of US cotton exports, although the modest currency movement was not sufficient to prevent futures from finishing lower.

US Cotton Crop Progress: Boll Opening Remains Behind Average

The latest USDA Crop Progress report showed that 92% of the US cotton crop had open bolls.

This remains 3 percentage points behind the five-year average of 95%, indicating that boll opening is progressing slightly slower than the normal seasonal pace.

The US cotton harvest was reported at 63% complete. The supplied five-year average is 65%, placing harvesting 2 percentage points behind the historical benchmark.

The figures suggest that the crop is moving towards completion, although both boll opening and harvesting remain marginally behind their respective averages.

The remaining harvest progress will be important for determining the pace at which physical cotton becomes available to the market. Weather conditions and fieldwork opportunities will influence how quickly the remaining crop can be collected.

Physical Cotton Market Activity Remains Limited

The Seam reported just 219 bales sold on October 30, at an average price of 68.67 cents per pound.

The limited volume indicates relatively subdued trading activity in the reported physical market.

In contrast, the Cotlook A Index increased by 35 points on October 30 to 90.20, providing a stronger international price reference.

ICE certified cotton stocks declined by 613 bales on Friday, leaving the certified stock level at 26,978 bales.

The Adjusted World Price fell by 50 points on Thursday to 64.51 cents per pound.

These indicators provide a mixed picture. The higher Cotlook A Index and declining certified stocks offer some supportive signals, while limited physical trading and a lower Adjusted World Price reflect continued uncertainty across the cotton market.

Bullish Sentiment: Factors Supporting Cotton Prices

1. Cotlook A Index strengthens: The index advanced 35 points to 90.20, indicating stronger pricing in the international physical cotton market.
2. ICE certified stocks decline: Certified stocks fell by 613 bales to 26,978, reducing the available certified inventory figure.
3. US dollar edges lower: The 0.075 decline in the dollar index may offer some support to the competitiveness of US cotton in international markets.
4. Boll opening remains behind average: At 92%, progress is 3 percentage points below the five-year average, potentially delaying the timing of additional physical supplies.
5. Futures recover from earlier weakness: Although contracts finished lower, the recovery towards unchanged suggests that some buying interest remains present.

Bearish Sentiment: Factors Weighing on Cotton Prices

1. Sharp crude oil decline: Crude oil fell $7.86 per barrel, creating pressure across the wider commodity complex and potentially reducing support for cotton relative to synthetic fibres.
2. Cotton futures remain lower: December, March and May contracts all finished in negative territory.
3. Harvest continues to advance: The US harvest is 63% complete, bringing a substantial portion of the crop into the physical supply chain.
4. Physical trading activity is limited: The Seam recorded only 219 bales sold, suggesting subdued activity in the reported market.
5. Adjusted World Price declines: The AWP fell 50 points to 64.51 cents per pound, providing another weaker price signal.

Cotton Price Forecast: What Traders Are Watching

The near-term cotton outlook remains cautious, with futures struggling to establish positive momentum despite some supportive signals from international prices and certified inventory levels.

December 2026 cotton settled at 77.66 cents per pound, making the 78-cent area an important nearby reference point. A sustained move above this level could help improve short-term sentiment, while further weakness may expose the market to additional selling pressure.

March 2027 futures at 81.49 cents and May 2027 at 83.13 cents will also be monitored for signs of stronger forward-market buying.

The relationship between crude oil and cotton will remain important. Continued weakness in energy prices could weigh on sentiment, particularly if synthetic fibre costs become more competitive.

At the same time, the progress of the US harvest and developments in physical cotton pricing will help determine whether the current market weakness is supported by improving supply availability or whether tighter inventory conditions begin to offer greater support.

US Cotton Supply Outlook

The US cotton crop is moving towards the later stages of its seasonal development, with 92% of bolls open and 63% of the harvest completed.

Both indicators remain slightly behind their respective five-year averages, suggesting that the crop is progressing marginally slower than normal.

The remaining harvest will be important for the near-term supply picture. A faster pace of collection could increase the availability of physical cotton, while weather-related delays could slow deliveries and affect the timing of supply reaching the market.

ICE certified stocks currently stand at 26,978 bales following a decline of 613 bales. Although this represents a relatively small inventory movement, certified stock levels remain an important reference for traders monitoring deliverable supplies.

Cotton Demand and International Price Outlook

The physical market indicators are mixed.

The Cotlook A Index advanced 35 points to 90.20, suggesting stronger international pricing, while The Seam recorded limited trading activity with just 219 bales sold.

The Adjusted World Price declined to 64.51 cents per pound, adding another softer signal to the US pricing environment.

The lower US dollar may offer some assistance to export competitiveness, but the impact will depend on international buying interest, competing origins and the relative pricing of alternative fibres.

Crude oil is another important variable. A substantial decline in energy prices can affect the relative economics of synthetic fibres, potentially influencing demand expectations for cotton.

Market Outlook for the Coming Sessions

Cotton futures are entering the next sessions with a mixed fundamental backdrop and a cautious price structure.

The recovery towards unchanged during the latest session suggests that selling pressure eased, but all three listed contracts still finished lower.

Traders will be monitoring five important developments:

• Crude oil prices: Whether the sharp $7.86 decline continues to influence wider commodity sentiment and synthetic fibre competitiveness.
• US crop progress: Whether boll opening and harvesting close the gap with their five-year averages.
• Physical cotton activity: Whether trading volumes through The Seam recover from the reported 219 bales.
• Certified inventory: Whether ICE stocks continue to decline from the current 26,978 bales.
• International pricing: Whether the Cotlook A Index can maintain its recent advance.

A stabilisation in crude oil, stronger physical market activity and continued support from international cotton prices could help futures recover. Conversely, further energy market weakness and increasing harvest availability may keep prices under pressure.

Today Markets Analysis

Cotton futures remain under pressure, but the latest market indicators do not point to a uniformly bearish environment.

The sharp decline in crude oil is an important factor, with energy market weakness potentially affecting sentiment towards cotton and the competitiveness of synthetic fibres. December 2026 futures finished at 77.66 cents per pound, down 17 points, despite recovering from earlier weakness.

US crop progress is marginally behind average, with 92% of bolls open against a five-year average of 95%. Harvesting stands at 63%, compared with the supplied historical average of 65%. This suggests that physical supply is continuing to enter the market, although the seasonal pace remains slightly behind normal levels.

The physical market also presents conflicting signals. The Seam recorded only 219 bales sold, while the Cotlook A Index advanced 35 points to 90.20. ICE certified stocks declined to 26,978 bales, but the Adjusted World Price also moved lower.

For the coming sessions, crude oil, physical cotton activity and harvest progress will be the main variables to watch. A stronger international price environment could help support futures, but sustained buying interest will be needed to reverse the recent weakness.

Currency Hedger View

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Businesses purchasing raw cotton internationally may face additional costs when transactions are priced in US dollars but revenues and operating expenses are denominated in euros, pounds or other currencies.

A decline in cotton prices may benefit buyers, but an adverse exchange-rate movement can offset some of that advantage. Equally, exporters receiving dollar-denominated proceeds may see the value of those receipts change before conversion into their operating currency.

For businesses with forward procurement agreements, inventory commitments or scheduled international payments, managing the currency component is an important part of protecting commercial margins.

Currency Hedger helps businesses assess foreign-exchange exposure and explore suitable strategies for managing international payments, receipts and currency risk.

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Disclaimer

This article is provided for informational and market commentary purposes only. It does not constitute investment advice, financial advice, a recommendation or an offer to buy or sell any financial instrument or commodity. Futures and derivatives trading involve significant risk and may not be suitable for all investors. Market prices and forecasts can change without notice. Businesses should assess their individual commercial and currency exposures and seek appropriate professional advice before entering into hedging or trading transactions.

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