ICE Cotton Futures Rise on US Dry Weather Worries
ICE cotton futures closed higher on Wednesday as ongoing dry weather concerns in major US cotton-growing regions, especially West Texas, continued to support bullish market sentiment. Traders remained worried about limited rainfall and increasing moisture stress, which could impact crop development and production prospects. Strong speculative buying also kept prices firm throughout the session.
The most-active July 2026 cotton contract settled at 86.81 cents per pound, gaining 0.49 cent and marking its second-highest close of the season, as well as the strongest settlement since April 2024. The December 2026 contract ended at 86.46 cents, up 0.18 cent, also recording one of the highest levels of the current rally.
Support for cotton prices also came from rising crude oil values, with oil trading above $100 per barrel. Higher energy prices increase the production cost of polyester and other synthetic fibres, improving the competitiveness of natural fibres like cotton. In addition, growing global interest in sustainable and eco-friendly textile materials continued to provide long-term support to cotton demand.
Market participants also discussed the possibility of stronger Chinese demand for US cotton, including market rumours about purchases by the Chinese State Reserve. These expectations added further strength to futures trading.
Meanwhile, ICE certified cotton stocks increased by 1,160 bales to 185,378 bales as of May 12. In Brazil, consultancy Safras & Mercado estimated the country’s 2025-26 cotton crop at 3.347 million tonnes, slightly below earlier trade expectations.
Broader financial markets also influenced cotton trade. Stronger-than-expected US wholesale inflation data reduced hopes of immediate Federal Reserve interest rate cuts, while geopolitical tensions involving the US and Iran kept commodity markets volatile. However, firm US equity markets and improved investor confidence supported overall risk appetite.
Trading activity remained strong, with total cotton futures volume reaching 81,518 contracts. Open interest rose slightly to 335,218 contracts, indicating traders largely maintained bullish positions, while options trading remained active.
Traders are now closely watching upcoming USDA Export Sales data, the CFTC On-Call Report, and the weekly Commitment of Traders (COT) Report for fresh market direction. Overall, cotton futures continue to hold a cautiously bullish tone due to weather risks, delayed US planting, firm crude oil prices, and expectations of stronger export demand.
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