Cotton futures fell sharply across the board on Thursday, with front-month contracts losing more than 200 points as weak new-crop export sales, lower benchmark prices and a decline in crude oil added pressure to the market.
Cotton futures posted losses across the board, with front-month contracts declining between 179 and 219 points.
Crude oil fell $1.34 per barrel on the session, while the US dollar index slipped 0.024 points.
The latest USDA Export Sales report showed just 71,231 RB of 2026/27 cotton sales for the week ending September 10, highlighting relatively subdued new-crop demand.
Vietnam was the largest buyer with 28,200 RB, followed by Guatemala with 14,000 RB.
New-crop 2027/28 sales totaled just 6,160 RB.
However, physical shipments provided a more supportive signal, reaching 142,078 RB, which was 17.91% above the same week last year.
Vietnam was again the leading destination, receiving 44,600 RB during the week.
The market is therefore facing a mixed demand picture: weak new sales commitments but significantly stronger physical shipments.
Meanwhile, The Seam reported an average sale price of 75.22 cents per pound in Wednesday’s sale covering 300 bales.
The Cotlook A Index declined 5 points on September 16 to 94.60, while ICE-certified cotton stocks fell by 1,313 bales to 36,617 bales.
The Adjusted World Price also weakened, falling 59 points to 68.92 cents per pound.
Cotton Market Snapshot
| Factor | Current Signal |
|---|---|
| Oct 26 Cotton | 78.41 cents/lb |
| Daily move | -203 points |
| Dec 26 Cotton | 82.17 cents/lb |
| Daily move | -219 points |
| Mar 27 Cotton | 84.81 cents/lb |
| Daily move | -208 points |
| 2026/27 export sales | 71,231 RB |
| 2027/28 new-crop sales | 6,160 RB |
| Weekly shipments | 142,078 RB |
| Shipments YoY | +17.91% |
| Top buyer | Vietnam — 28,200 RB |
| Top shipment destination | Vietnam — 44,600 RB |
| The Seam average price | 75.22 cents/lb |
| Cotlook A Index | 94.60 |
| ICE certified stocks | 36,617 bales |
| Weekly ICE stock change | -1,313 bales |
| Adjusted World Price | 68.92 cents/lb |
| Crude oil | -$1.34/bbl |
| US Dollar Index | -0.024 |
Why Cotton Futures Are Falling
The primary pressure point in Thursday’s market was the weakness in cotton futures themselves, with all three highlighted contracts losing more than 200 points.
The decline comes against a backdrop of relatively light new-crop export commitments.
The latest Export Sales report showed only 71,231 RB of 2026/27 sales, while 2027/28 commitments were just 6,160 RB.
That suggests buyers are not aggressively extending forward commitments despite the beginning of the new crop marketing period.
Vietnam was the largest buyer, accounting for 28,200 RB, while Guatemala purchased another 14,000 RB.
The relatively limited level of new sales is therefore weighing on sentiment.
However, the demand picture is not uniformly negative.
Actual shipments were considerably stronger, reaching 142,078 RB, up 17.91% from the same week last year.
The market must therefore distinguish between new demand commitments and physical demand already being fulfilled.
Export Shipments Provide a Supportive Signal
While new sales were disappointing, weekly shipments provided an important counterbalance.
Shipments reached 142,078 RB, significantly above the same period last year.
The 17.91% year-on-year increase indicates that cotton is continuing to move through the export channel at a healthy pace.
Vietnam was the largest destination, receiving 44,600 RB.
That is important because strong shipments can indicate that previously booked export business is being converted into actual physical demand.
The question for traders is whether this stronger shipment pace can eventually encourage additional buying.
If new sales begin to accelerate while shipments remain elevated, the demand picture could improve.
If shipments remain strong but new commitments stay weak, the market could continue viewing the current export environment as supportive for existing demand but less encouraging for future sales.
Cotton Prices and Physical Markets Remain Under Pressure
The Seam reported an average sale price of 75.22 cents per pound in Wednesday’s sale involving 300 bales.
The Cotlook A Index also declined, falling 5 points to 94.60 on September 16.
The combination of lower futures prices and a weaker physical benchmark suggests that the pressure is not confined solely to the futures market.
The Adjusted World Price fell another 59 points to 68.92 cents per pound on Thursday.
The lower AWP adds another indication that the international pricing environment has weakened.
For producers, merchants and processors, the relationship between futures, physical cotton values and the AWP will remain important as the new crop develops.
ICE Certified Stocks Are Declining
One of the more supportive elements in the latest data is the decline in ICE-certified cotton stocks.
Certified stocks fell by 1,313 bales on September 16, leaving total certified inventories at 36,617 bales.
Lower certified stocks can provide a supportive signal because exchange-certified inventory represents cotton available to satisfy futures delivery requirements.
However, the decline needs to be considered alongside the broader demand picture.
If certified stocks continue falling while export shipments remain strong, physical availability could become a more important market consideration.
If export demand weakens and stocks subsequently stabilize or rebuild, the supportive impact of declining certified inventories could diminish.
Crude Oil and the US Dollar Add to the Pressure
The broader commodity environment also provided little assistance to cotton on Thursday.
Crude oil declined $1.34 per barrel, while the US dollar index fell 0.024 points.
Energy prices can influence cotton indirectly through competition with synthetic fibres and through agricultural production and transportation costs.
The direction of the US dollar is also important for US cotton because exchange-rate movements affect the competitiveness of American exports in international markets.
Thursday’s dollar move was relatively small, but currency conditions remain an important variable for global cotton demand.
For international buyers, changes in the dollar can alter the effective cost of US cotton even when the futures price itself remains unchanged.
Bullish Sentiment
1. Export Shipments Are Above Last Year
Weekly shipments reached 142,078 RB, up 17.91% year-on-year.
That indicates that physical export movement remains relatively strong.
2. ICE Certified Stocks Are Falling
Certified stocks declined by 1,313 bales to 36,617 bales.
Continued reductions could provide a supportive signal for exchange-deliverable supply.
3. Vietnam Remains an Important Buyer
Vietnam purchased 28,200 RB of 2026/27 cotton and was also the leading shipment destination with 44,600 RB.
The country’s continued presence in both sales and shipments demonstrates ongoing participation in the US cotton market.
4. Physical Demand Is Outperforming New Sales
Although new export commitments were relatively weak, actual shipments remained strong.
That suggests previously booked demand continues to translate into physical movement.
5. Lower Certified Inventory Could Become More Significant
If certified stocks continue declining while shipments remain elevated, available exchange stocks could become increasingly relevant to price formation.
Bearish Sentiment
1. New-Crop Export Sales Are Weak
2026/27 sales totaled only 71,231 RB during the latest reporting week.
That indicates relatively limited fresh forward demand.
2. 2027/28 Commitments Are Also Limited
New-crop 2027/28 sales were only 6,160 RB, suggesting buyers have so far shown limited appetite for extending commitments further into the future.
3. Cotton Futures Fell More Than 200 Points
October cotton declined 203 points, December fell 219 points, and March 2027 dropped 208 points.
The broad-based decline indicates significant selling pressure across the futures curve.
4. The Cotlook A Index Is Falling
The Cotlook A Index declined to 94.60, reflecting additional weakness in benchmark physical cotton values.
5. The Adjusted World Price Declined
The AWP fell 59 points to 68.92 cents per pound, adding to the evidence of weaker pricing conditions.
6. Crude Oil Prices Declined
Crude oil fell $1.34 per barrel, removing a potential supportive factor from the broader commodity complex.
The Key Question Is Whether Shipments Can Translate Into New Demand
The most important feature of the latest cotton data is the difference between sales and shipments.
New 2026/27 sales were only:
71,231 RB
while shipments reached:
142,078 RB
That means shipments were almost twice the level of new sales during the reporting week.
This creates a two-sided interpretation.
The positive interpretation is that previously booked cotton continues to move at a healthy pace.
The negative interpretation is that buyers are currently committing to significantly less new business than the volume being shipped.
For the market, the next question is therefore whether export sales begin catching up with the current shipment pace.
A sustained improvement in new commitments would provide a stronger demand signal.
Conversely, continued weak sales could reinforce concerns that current shipment strength is primarily the result of earlier bookings rather than accelerating fresh demand.
Vietnam Remains Central to the Export Picture
Vietnam featured prominently in both the sales and shipment data.
The country purchased 28,200 RB in the latest 2026/27 sales report and accounted for 44,600 RB of shipments.
This makes Vietnam an important market to monitor in the coming reports.
Continued Vietnamese buying would help support the export demand picture.
A reduction in purchases, particularly if accompanied by weaker buying from other major textile-producing countries, could place additional pressure on US cotton export expectations.
The Futures Curve Remains Under Pressure
The latest settlements show:
October 2026: 78.41 cents
December 2026: 82.17 cents
March 2027: 84.81 cents
All three contracts declined by more than 200 points.
The structure of prices also shows higher values further along the curve, with March 2027 trading above the nearby October and December contracts.
That structure will remain important as traders assess the transition from the current crop into the new crop.
The market will be watching whether nearby weakness begins to spread further into deferred contracts or whether longer-dated prices begin finding greater support.
What Traders Are Watching Next
The major cotton-market catalysts include:
- USDA weekly Export Sales
- 2026/27 new-crop sales
- 2027/28 forward commitments
- Weekly export shipments
- Vietnamese cotton demand
- Chinese cotton demand
- ICE-certified stocks
- Cotlook A Index
- Adjusted World Price
- The Seam physical prices
- Crude oil prices
- US dollar movements
- US crop conditions
- Harvest progress
- Global textile demand
- Global cotton inventories
- Weather across major producing regions
The most immediate focus will be whether the next Export Sales reports show an improvement in new-crop commitments.
Currency Hedger View
Cotton is a globally traded commodity, meaning currency movements can materially influence the effective price paid by international buyers and the competitiveness of exporters.
US cotton is predominantly priced in US dollars, while textile manufacturers and commodity buyers may generate revenues or hold operating costs in other currencies.
A move in the US dollar can therefore change the effective local-currency cost of cotton independently of movements in the underlying futures price.
For example, a buyer whose operating currency weakens against the dollar could face a higher effective cotton cost even if ICE cotton futures remain unchanged.
This creates a combined exposure:
Cotton price risk + USD exchange-rate risk.
For cotton merchants, textile manufacturers, exporters and international buyers, managing the currency component can therefore be an important part of managing the overall commodity exposure.
Currency Hedger, part of Octalas Group Ltd, focuses on foreign-exchange exposure and currency-risk management for businesses operating across international markets.
Today Markets View
Cotton is facing a market of conflicting signals.
Futures are under significant pressure, new-crop export sales remain relatively weak, the Cotlook A Index and Adjusted World Price have declined, and crude oil prices have fallen.
At the same time, physical shipments are running 17.91% above last year and ICE-certified stocks have declined by 1,313 bales.
The central issue for traders is therefore whether the strong shipment pace can translate into stronger forward sales.
For now, the futures market appears to be placing greater weight on the weakness in fresh export commitments than on the stronger physical shipment figures.
The next series of USDA Export Sales reports should provide an important indication of whether this divergence is temporary or represents a broader change in international cotton demand.
“Cotton is currently caught between strong physical shipments and weak new-crop commitments. The 17.91% increase in shipments provides evidence of ongoing demand, but the relatively low level of fresh sales is keeping pressure on futures. The next export reports will be important in determining whether buyers return to the market or whether the recent weakness continues.”
— Louis Roche, Analyst, Today Markets
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