Cotton futures traded higher on Wednesday, with front-month contracts showing gains ranging from 41 to 83 points so far in the session. The move came with support from key outside markets, including crude oil prices rising and the U.S. dollar index edging lower.
In the latest USDA cotton balance sheet update on Tuesday, most U.S. supply figures were unchanged, while pricing indicators continued to soften. Meanwhile, weekly activity data and world supply updates offered additional context for commodity traders weighing whether demand will keep pace with exports.
Key takeaways
- Price move: May 25 cotton was up 82 points after closing unchanged, while Oct 25 cotton gained 41 points following a 9-point advance in its prior close.
- Catalyst: Wednesday’s gains were supported by firmer crude oil and a lower dollar, alongside a USDA update that left key U.S. stock and demand figures largely steady.
- Market implication: World supply adjustments—particularly tighter 2024/25 stocks outside the U.S.—remain a key driver as traders monitor export flows.
- Pricing signal: The USDA reduced the Adjusted World Price to 51.88 cents per pound, reinforcing downward pressure on the pricing floor.
What drove the move
Commodity price action remained anchored to the broader complex. Crude oil futures rose 59 cents per barrel, while the U.S. dollar index fell $0.598 on the day—an outside-market combination that can help risk sentiment and improve competitiveness for U.S. exports.
On the domestic supply side, the USDA’s Tuesday morning update to the cotton balance sheet reported no changes to the U.S. totals. U.S. stocks were left at 4.9 million bales, and the average farm price slipped by 50 points to 63 cents per pound.
Additional USDA-linked volume data also fed into sentiment. The Cotton Ginnings report showed 162,950 RB ginned during February, bringing the season’s total to 14.124 million RB. That total was 20.23% higher than the same period a year earlier, indicating continued strength in ginning throughput.
Balance sheet and global supply updates
On the world side of the USDA balance sheet, stocks for 2024/25 were reduced by 80,000 bales to 78.33 million bales. The decline reflected a 200,000 bale cut to Brazil stock levels tied to increased exports, partially offset by Australian stocks rising by 100,000 bales.
Export and marketing activity also remained in focus. According to The Seam’s Monday online auction results, 4,756 bales were sold at an average price of 61.17 cents per pound. The Cotlook A Index added 75 points on March 10 to reach 77.70 cents per pound, signaling firmer reference pricing in the global market.
ICE cotton stocks were unchanged on March 10, with certified stocks held at 14,488 bales, offering no immediate inventory pressure signal from the exchange system.
USDA price floor reset and what traders may watch next
Another factor traders monitored was the USDA’s Adjusted World Price mechanism. The report said the AWP was reduced by 201 points to 51.88 cents per pound on Thursday afternoon, reinforcing a lower pricing floor for the marketing season.
Against that backdrop, cotton futures moved as follows: May 25 cotton closed at 66 cents per pound, unchanged, and was up 82 points in the current session. Jul 25 cotton closed at 67.19 cents per pound, down 2 points, and was up 79 points. Oct 25 cotton settled at 69.2 cents per pound, up 9 points, and was up 41 points at the time of reporting.
Looking ahead, investors will likely focus on additional USDA updates, export-related indicators, and any further revisions to global supply and pricing assumptions—especially given the combination of steady U.S. stocks, tighter world inventories outside the U.S., and a lower AWP. Outside markets, including crude oil and the dollar, may continue to influence daily trading momentum.
