Through Friday, November 7, ICE cotton futures gradually descended across the week (see chart above courtesy of Barchart.com). Dec’25 ICE cotton futures settled Friday at 63.62 cents per pound.
Other ag futures markets show similar patterns this week. CBOT corn and soybeans, as well as KC wheat futures, gyrated sideways before taking a big stair step lower. ICE WTI crude oil futures followed a bumpy descending pattern. In contrast with these physical commodities, the U.S. Dollar Index gradually rose before reversing and more steeply declining. 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. The next expected data release is NASS production and WASDE projection on November 14. USDA AMS this week reports higher spot prices week over week with cotton demand varying from very light to moderate. As of November 6, AMS also reported 33% 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 and longer. 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, November 6, the session by session increases in cotton open interest combined with the declining price settlements, gave the appearance of new short selling. 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.