Cotton Futures Rally on Weaker Dollar and Persistent Weather Concerns

The ICE cotton futures market saw gains on Wednesday despite profit booking that led to selling pressure. The US dollar's weakness provided support, making US cotton more affordable for overseas buyers.

The most active December 2026 contract settled at 83.02 cents, up 0.56 cent or 0.68% from the previous day. Although it reached its highest settlement since late May, it closed 106 points below the session's high.

The market analysts point to the softer US dollar as a consistent supporter of cotton prices by making US fibre more attractive to international buyers. Weather concerns remain dominant, with persistent extreme heat across major producing regions such as West Texas, India, and China's Xinjiang region raising concerns about crop stress during the crucial boll development period.

Forecasts called for temperatures approaching 50°C in parts of Xinjiang, while hot and dry conditions persisted across several major producing regions. Analysts increasingly believe the market is pricing in potential production losses, with August being the most critical month for cotton development in many producing countries.