October 20, 2025

The Week Ahead

• It seems that every week has become a “critical week” in the ongoing government shutdown. Now entering its fourth week, it stands as the third-longest in U.S. history — and the longest full shutdown ever. Both sides are under mounting pressure to find a path forward as deadlines tied to health care, funding, and worker paychecks draw closer. Lawmakers may soon craft a resolution that allows each side to claim progress, but until then, the prolonged stalemate continues to weigh on the economy and public confidence. In the meantime, traders are flying blind — making decisions without fresh data and relying on broader headlines to guide the market’s next move.
• It’s worth noting that the CCC loan remains unavailable to producers and cooperatives as harvest gets underway. The industry needs a long-term fix to keep this program running during government funding lapses. There’s truly never a good time for growers to be without a safety net.

 Market Recap

• Cotton futures saw a modest rebound last week after President Trump suggested in an interview that tariffs on China were “not sustainable.” Trade tensions remain elevated, but upcoming meetings could help clarify the outlook before the November 1 tariff implementation. December futures ended 44 points higher at 64.28, offering brief relief but little change to the bigger picture.
• Prices remain well below long-term averages, and with no fresh data in weeks, speculative funds are likely still holding large short positions. The overall tone stays weak, and without stronger cues from the broader commodity space, it’s difficult to make a case for a lasting recovery. If this marketing year continues to trade in reverse, peaking early and fading later, it would be the fourth season in a row to follow that pattern, something rarely seen. For now, traders are watching for any signs of stabilization across ag markets or an improvement in export tone that could help cotton firm up.
• Trading volume stayed active, with some buying near the lows. However, there have been more inquiries with the lower prices, demand remains weak. Open interest decreased 7,932 contracts to 290,141, while certificated stocks increased 281 bales to 16,752.

Economic and Policy Outlook

• The government shutdown has left markets flying blind, with no fresh data for more than 20 days. The Bureau of Labor Statistics was called back last week to finalize the long-delayed inflation report ahead of next week’s Fed meeting. Originally slated for release earlier this month, the data was pushed back due to the shutdown and will now be published on Friday. It’s the first major economic readout since the pause, and it could set the tone heading into the Fed’s October 29 policy decision. For cotton, any hint of easing inflation or stronger demand could be key to stabilizing prices at current lows.
• Crude oil remains under pressure, weighed down by rising inventories and soft demand. Prices are off about 7% for the month, leaving energy among the most oversold areas of the commodity space. The weakness has spilled into broader market sentiment, helping keep inflation expectations subdued even as a Fed rate cut is already baked in for next week. Softer crude can also act as a headwind for cotton at times, especially when lower energy prices dampen overall commodity momentum.

Weather and Crop Watch

• Harvest is in full swing across the Southwest and moved along well last week before light weekend rain briefly slowed activity in parts of West Texas and southwestern Oklahoma. Totals were minimal, and conditions quickly improved, keeping overall progress on track. The next two weeks look mostly dry and favorable, with only a few light showers late this week that could cause short interruptions. Temperatures will swing between the 70s and 90s, briefly cooler late week before warming again early next week — overall, a supportive pattern for harvest.

The Seam

• As of Friday afternoon, grower offers totaled 30,886 bales. The past week 1,691 bales that traded on the G2B platform that received an average price of 59.78 cents per pound. The average loan for these bales was 54.07, bringing the average premium received to 5.71 cents per pound.