Cotton futures bounced higher on Wednesday morning, with contracts gaining 14 to 26 points, reversing some of Tuesday's losses. The uptick comes after the USDA reported a decline in crop condition ratings, with good-to-excellent ratings falling 2 percentage points to 44%. The market is also watching crude oil and the US dollar, which both rose on Tuesday.
Crop Progress and Condition Ratings
Monday afternoon's Crop Progress report showed that 60% of the US cotton crop had squared as of Sunday, 1 percentage point ahead of the normal pace. Boll setting reached 22%, matching the five-year average. However, crop condition ratings slipped: the percentage rated good or excellent dropped to 44%, down 2 points from the previous week. The Brugler500 index, a composite measure, fell 1 point to 331. Texas, the largest cotton-producing state, saw its ratings decline by 7 points, while Georgia improved by 2 points.
Price Action and Market Factors
On Tuesday, cotton futures closed lower despite a midday bounce, with contracts down 23 to 74 points. The market was pressured by a stronger US dollar, which gained 0.325 points, and higher crude oil prices, up $1.69 per barrel. Wednesday's recovery is modest, with October 2026 cotton up 26 points to 79.86 cents per pound, December 2026 up 16 points to 81.03 cents, and March 2027 up 17 points to 82.40 cents.
Other Market Data
The Cotlook A Index, a global benchmark, remained unchanged on July 13 at 90.70 cents per pound. ICE certified cotton stocks fell by 5,842 bales due to decertification, bringing the total to 121,258 bales. The Adjusted World Price, used to calculate US loan deficiency payments, rose 92 points last week to 62.86 cents per pound.