Through Friday, October 24, ICE cotton futures gyrated sideways-to-lower, settling Friday at 64.20 cents per pound (see chart above courtesy of Barchart.com). Chinese cotton prices were mostly rising this week while the A-Index of world cotton prices was mixed.
Other futures markets followed various pathways this week, most of them bullish. CBOT corn gyrated sideways before shifting higher. CBOT soybeans trended higher most of the week. KC wheat futures trended lower, then switched to an uptrend, and finally shot higher and leveled off. ICE WTI crude oil futures followed a narrow sideways pattern that gradually shifted into an uptrend. In contrast with these physical commodities, the U.S. Dollar Index began the week in an uptrend before leveling off in a sideways gyrations. Other macro influences (i.e., GDP, inflation, and interest rate policy) remained mixed in their expectation and implication for slow economic growth.
Cotton-focused market influences were hard to document in the absence of regular weekly data from USDA NASS and USDA FAS due to the federal shutdown. USDA AMS this week reports higher spot prices week over week with cotton demand varying from very light to moderate. As of October 23, AMS also reported 18% of forecasted U.S. production being classed.
The onset of La Niña conditions is contributing to a drier fall. This could be neutral/beneficial to the maturing 2025 crop, at the cost of dryness in early 2026. On the other side of the world, the precocious Indian monsoon was stronger/later than normal. It remains to be seen whether summer floods in India and especially Pakistan were a net benefit or detriment to summer-sown crops like cotton.
Through Thursday, October 23, the session by session decreases and (mostly) increases in cotton open interest combined with the mixed pattern of price settlements, implied a little bit of everything: more spec buying, more spec selling, long liquidation, and short covering. Unfortunately, this cannot be confirmed since the federal shutdown prevented an update of the Tuesday (September 23) snapshot of speculative open interest. The latter reflected short positioning with 1,723 additional hedge fund shorts, week over week, reinforced by 1,582 fewer (liquidated) hedge fund longs and a 2,808 position contraction of the index trader net long position.
The dynamics of ICE cotton futures may also represent a wet blanket on the market. It remains true that unfixed call sales (by mills) are at an historically low level, perhaps reflecting the cautionary buying on the demand side. In terms of ratios, unfixed call purchases (by suppliers) outweigh unfixed call sales by over two-fold across all contracts, as of September 19 (not updated due to the federal shutdown). For the Dec’25 contract alone, there were over three unfixed call purchases for every unfixed call sale.
For more details and data on Old Crop and New Crop fundamentals, plus other near term influences, follow these links (or the drop-down menus above) to those sub-pages.