RECENT PRICE MOVEMENT
All cotton benchmarks decreased over the past month.
- The December NY/ICE futures contract began to decrease at the end of August. Between the end of August and the start of October, it fell from 93 to 78 cents/lb. More recently, prices have recovered slightly and are currently near 80 cents/lb.
- Prices for other 2026/27 NY/ICE contracts (March, May, and July) continue to trade higher than December. Values for May remain the highest and are currently trading near 85 cents/lb.
- After recent decreases in 2026/27 prices, the gap has closed, but prices for 2027/28 NY/ICE contracts have been trading at a discount to 2026/27 prices. The December 2027 contract is near 78 cents/lb.
- The A Index was briefly above 100 cents/lb around the start of September. Since then, it retreated to levels as low as 88 cents/lb. Current levels are near 91 cents/lb.
- The CC (China Cotton) Index 3128B was 124 cents/lb (18,400 RMB/ton) at the start of September. The latest values are near 120 cents/lb (17,200 RMB/ton). The RMB was steady around 6.71 RMB/USD.
- Indian prices fell from 94 to 86 cents/lb between the start of September and the present. In terms of INR/candy, prices ranged between 70,000 and 64,700 INR/candy. The INR held near 96 INR/USD.
- Pakistani cotton prices decreased from 85 to 81 cents/lb or from 19,400 to 18,400 PKR/maund. The PKR held near 277 PKR/USD.
SUPPLY, DEMAND, & TRADE
The latest USDA report included increases for both world production (+636,000 bales to 118.0 million) and mill-use in 2026/27 (+162,000 bales to 123.1 million). Revisions to estimates for previous crop years lifted 2026/27 beginning stocks 392,000 bales, to 75.7 million. The net effect was an 822,000 bale increase for 2026/27 ending stocks, to 70.7 million.
The largest updates to 2026/27 production numbers included those for Brazil (+500,000 bales to 19.0 million), the U.S. (+241,000 bales to 13.4 million), and Argentina (-125,000 bales to 1.3 million).
For mill-use, there was only one revision for 2026/27 that was 100,000 bales or more (Vietnam +100,000 bales to 8.3 million). There were a couple of notable changes for 2025/26 estimates (India +250,000 bales to 26.3 million and Uzbekistan -500,000 bales to 3.5 million).
The global trade forecast for 2026/27 was increased +482,000 bales to 44.7 million. The largest revisions to imports were for India (+300,000 bales to 3.3 million) and Vietnam (+100,000 bales to 8.3 million). The only revision to exports over 100,000 bales was for Brazil (+500,000 bales to 16.0 million).
PRICE OUTLOOK
With repeated moves over 90 cents/lb followed by retreats below 80 cents/lb, an unresolved question is whether the market can find a stable balance between prices and demand. The year-over-year tightening of global stocks in 2026/27 may be encouraging higher price ideas, but as values have climbed higher, there have been recurrent pullbacks from the buying side.
One of the few high-frequency data sources for gauging mill demand is the USDA’s weekly export sales report. These numbers corroborate anecdotal reporting of hesitant mill purchasing during the last period of higher prices, with fewer than 100,000 bales sold for delivery in the current crop year in each of the four weeks from August 20 through September 10. This period coincided with NY/ICE December futures holding over 85 cents/lb, and the sum of sales during these four weeks (302,000 480lb bales) was less than half the volume during the same period in the two previous crop years (628,000 bales in 2024/25 and 783,000 bales in 2025/26).
The retreat in mill buying may have been a factor that sent prices lower, but there could be other influences. Around the same time, fears of a smaller Chinese crop brought about by an exceptionally hot summer in Xinjiang were alleviated by stronger-than-expected yields. After releasing more than 400,000 tons (1.8 million bales), China halted its latest round of sales from its reserve system on October 1. The reserve auctions added available supply to the market, and no replenishment plans have been announced. Chinese prices decreased alongside NY/ICE futures throughout September.
In late September, the leaders of the U.S. and China met. Hopes for a deal that could have included commitments to purchase U.S. agricultural products may have been supporting prices ahead of negotiations. Cotton was on the list of U.S. exports that China suggested could have tariff reductions, but the absence of an announcement detailing purchase volumes may have deflated hopes for additional U.S. exports and put downward pressure on the cotton market. During this time, prices for other row crops, including corn and soybeans, also fell.
With the latest decreases in cotton prices, a divergence has emerged with the oil market. Although the correlation between daily prices has been insignificant, cotton prices and Brent crude prices have followed a similar general pattern since the outbreak of hostilities around Iran. Values in both markets rose when fighting started at the end of February, eased in June when talks were being held, and increased again after fighting resumed in July. However, cotton prices did not follow oil prices higher after the conflict expanded into the Red Sea region. Instead, cotton prices declined.
When cotton and oil prices were moving in the same general direction, a potential link was polyester. Oil is an input cost for polyester production, and polyester is cotton’s primary competitor for fiber market share. Higher oil prices can raise polyester prices, potentially improving cotton’s competitiveness. Nonetheless, a gap between polyester and cotton prices remains in most markets, and whether the recent divergent movement translates into stronger cotton demand may depend on how mills and downstream buyers respond to these changes in relative fiber prices.