Cotton Futures Experience Volatility as Oil Prices Surge and Geopolitical Tensions Escalate

Cotton futures are trading with significant losses on Thursday, correcting from recent near-limit gains seen on Tuesday. Market participants are closely monitoring external factors, including a $4.09 increase in crude oil prices following the U.S. airstrikes on Iran and President Trump’s statement regarding the ceasefire. Additionally, the U.S. has revoked waivers allowing Iran oil exports, further impacting market sentiment. The U.S. dollar index also rose by $0.087 during the same period.

Monthly export data from the U.S. Census Bureau revealed 1.46 million bales of cotton shipped in May, marking a 15.3% year-over-year increase and reaching a three-year high. However, this figure represents a 6.88% decline compared to the previous year’s export volume.

According to The Seam, only 94 bales were sold on July 7 at an average price of 65.76 cents. The Cotlook A Index rose 150 points on July 7 to 87.30 cents. ICE certified cotton stocks decreased by 95 bales on Tuesday through decertification, bringing the total certified inventory to 184,939 bales. The Adjusted World Price fell 194 points last week to 61.94 cents per pound.

July 26 cotton futures closed at 76.94 cents, up 299 points, while December 2026 contracts settled at 80.31 cents, down 98 points. March 2027 futures ended at 81.74 cents, reflecting a decrease of 94 points.

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