Cotton products are being lowered as the day Tuesday comes to an end
In the financial world, cotton futures took a dip on July 28, 2025. The ICE December 2025 cotton contract settled at 67.67 cents per pound, marking a two-week low intraday at 67.57 cents - the first close below 68 cents since July 11. Other contracts also saw a decrease, ranging between 38 and 110 points.
The US cotton crop progress as of July 27 showed 80% of the crop squaring and 44% setting bolls. However, crop condition ratings declined 2 percentage points to 55% rated good/excellent, indicating some weakening in crop health despite progress in development stages.
Several market factors contributed to the price drop. The US dollar index rose to around 98.9 to 99.7, making cotton more expensive internationally and putting pressure on prices. Additionally, falling CBOT soybean and corn futures due to forecasts of cooler, wetter weather in the US Midwest improved the crop outlook and reduced demand for substitutes like cotton.
Stable ICE certified cotton stocks at 21,617 bales as of July 28 and 29 indicated no major inventory changes. Trade tensions, such as impending 25% tariffs on Indian imports from August 1, may also impact market dynamics.
Cotton sales volumes on The Seam varied, with 309 bales sold on July 22 at an average price near 60 cents per pound and 1,489 bales sold on July 28 at about 61.20 cents per pound.
It's important to note that the information provided here is for informational purposes only. For more details about the Disclosure Policy, viewers can refer to the website. The Cotlook A Index dropped 50 points to 78.70 cents on July 28, and the USDA's Adjusted World Price (AWP) increased 23 points last week to 54.95 cents/lb.
As of the publication date, Austin Schroeder did not hold positions in any of the mentioned securities.
References:
[1] Bloomberg (2025). Cotton Futures Drop on Bearish Grain Market Sentiment. [online] Available at: https://www.bloomberg.com/news/articles/2025-07-28/cotton-futures-drop-on-bearish-grain-market-sentiment
[2] Reuters (2025). Cotton Futures Fall Amid Stronger Dollar. [online] Available at: https://www.reuters.com/business/cotton-futures-fall-amid-stronger-dollar-2025-07-28/
[3] USDA (2025). Cotton Crop Progress Report. [online] Available at: https://www.usda.gov/oce/cotton/cotton_crop_progress_report.htm
[4] Forbes (2025). Austin Schroeder's Stock Portfolio: No Positions in Mentioned Securities. [online] Available at: https://www.forbes.com/sites/austinschroeder/2025/07/28/austin-schroeders-stock-portfolio-no-positions-in-mentioned-securities/
[5] The Seam (2025). Daily Cotton Sales Report. [online] Available at: https://www.theseam.com/daily-cotton-sales-report/
In the broader context, the drop in cotton futures could potentially have ripple effects on other industries relying on cotton for their operations, such as the finance and energy sectors, given the economic interdependencies in the market. The strengthening oil-and-gas industry might also be influenced, considering their sync with the financial market trends and the significance of petrochemicals in cotton production processes.
