The cotton futures market propelled to an 18-month high this week, with prices above 73 US cents per pound for October contracts.

Commodity advisor Matthew Leeson, from Independent Commodity Management, said the price of cotton had been building, but several factors kicked in this week and caused the market to surge.

"We were a little bearish on the price on a US basis following the June 30 planted acreage report, where they increased 600,000 acres above the expectation, which is around a million bales in round numbers and [that] was a little depressive for the market," he said.

But a number of fundamental and technical factors changed then changed the landscape and caused the price to rise.

"The weather has turned a little bit in Texas, with warmer conditions forecast, they're looking for some rain," Mr Leeson said.

"And then overnight we had the US Department of Agriculture monthly supply and demand update and [that] played havoc with a few of the numbers, specifically on a global stage where they actually boosted Chinese consumption for old and new crops by a million and a half bales, which has got this market rolling," he said.

Matthew Leeson said it was too soon to call the price increase a trend.

"At this stage the mills have backed away, so the physical side of the market has gone dead.

"The speculators can certainly sustain this market for a short period of time but not over the medium term, so we'll have to see what the mills' reaction to it is, along with what the weather does in Texas.

"At this stage it's probably fair to say that in the global market, cotton is overpriced but that can change," Mr Leeson said.

The Australian dollar, which has remained steady at around 75 cents US, has taken the edge of the futures market rally for the Australian cotton crop, all of which is exported.

"[The dollar] has been stubbornly resilient despite some insecurity in the global financial markets with Brexit and so on, there has been opportunity for the Aussie [dollar] to come off but it doesn't appear to want to do so.

"Cash prices to growers are still well above average and at attractive levels both for current and for new crop but a lower Aussie would be quite helpful," Mr Leeson said.

Meantime, Chinese imports of Australian cotton remain limited due to that country's government controlling bales imported through its quota system.

"We probably won't see a lot of change in that given the domestic stockpile that they have, [although] there is a bit of demand for higher grades and they are letting a few of those in but [the government] is predominantly focused on selling their stocks to the local milling fraternity.

"I don't expect we will see a lot of Australian cotton move in to China over the next six to 12 months," Mr Leeson said.