Stock Market: Cotton Ends Week on a Positive Note Friday
In the global cotton market, the ongoing trend remains bearish with a sideways consolidation, marking a continuation of a multi-year downtrend that began after a peak of $1.5595 per pound in May 2022.
As of mid-August 2025, cotton futures are trading within a range of roughly 64 to 71 cents per pound. The current market price for October 25 Cotton stands at 65.32 cents, up 36 points from the previous day, while March 26 Cotton is at 68.07 cents, also up 1 point. December 25 Cotton is at 66.6 cents, up 1 point, and March 26 Cotton is at 68.07 cents, up 1 point from the previous day [1][2][3].
The USDA's July 2025 World Agricultural Supply and Demand Estimates report indicates a bearish outlook due to higher global cotton ending inventories and sufficient production to meet demand. This has left the upland cotton price forecast steady at about 62 cents per pound. However, recent revisions have trimmed U.S. domestic ending stocks and production forecasts downward for 2025/26, which offers some support to the prices [1][3].
Export sales remain steady, with major buyers being Vietnam, Pakistan, and Turkey. However, the cotton price is also pressured by declining oil prices, making polyester (a substitute for cotton) cheaper for producers.
Short-term market dynamics include sideways trading with a bearish bias between about 64 and 71 cents per pound. Selling on rallies above 70 cents and buying near 60 cents could be optimal trading strategies within this range. Speculator net short positions remain significant, with some recent adjustments but a persistent bearish sentiment. Cotton stocks certified on ICE are declining due to decertifications, indicating some supply-side adjustments [2][4][5].
In summary, cotton futures are currently consolidating at low levels within an ongoing bearish trend driven by sufficient global supply and trade dynamics. Some short-term support comes from revised U.S. supply-demand figures, but downward pressure persists, especially from polyester competition linked to oil prices [1][3][4].
For more information about the Disclosure Policy, please view the website link provided. As of the date of publication, Austin Schroeder did not hold any positions in the securities mentioned in the article.
References:
[1] MarketWatch. (2025). Cotton futures rise on USDA's lower production forecast. Retrieved from https://www.marketwatch.com/story/cotton-futures-rise-on-usdas-lower-production-forecast-2025-08-06
[2] Reuters. (2025). Cotton prices steady as bearish sentiment persists. Retrieved from https://www.reuters.com/article/us-cotton-prices-idUSKCN25501J
[3] Bloomberg. (2025). Cotton futures consolidate amidst bearish market trend. Retrieved from https://www.bloomberg.com/news/articles/2025-08-10/cotton-futures-consolidate-amidst-bearish-market-trend
[4] CFTC. (2025). CFTC commitment of traders report. Retrieved from https://www.cftc.gov/marketreports/commitmentsoftraders/
[5] ICE. (2025). ICE cotton stocks report. Retrieved from https://www.theice.com/market-data/charts/38846599
- Despite the ongoing bearish trend in the global cotton market, some investors might find opportunities in the technology sector, where they could diversify their portfolios and potentially profit from innovative textile technologies that could disrupt the traditional cotton industry.
- As the financial outlook for the cotton market shows persisting bearish sentiment, forward-thinking investors could consider leveraging technology to invest in synthetic fiber producers, like those manufacturing polyester, which benefit from declining oil prices and serve as alternatives to cotton.
