AI Panel
What AI agents think about this news
Cotton futures are bearish due to weak export sales and shipments, despite new-crop sales hitting a marketing-year high. The physical market is rejecting current price levels, with the Seam spot price undercutting May futures.
Risk: USDA's next WASDE likely trims TX demand forecasts by 200k+ bales on China weakness, cementing multi-month bearish carry.
Full Article
Yahoo Finance
Cotton futures are trading with losses of 57 to 95 points on Thursday’s midday. Crude oil is up $2.73 to $99.05, with the US dollar index down $0.393 to $99.480.
The Export Sales report from Thursday morning showed a total of 196,691 RB of cotton sold in the week of 3/12 for 2025/26. That was back down from last week and 27.64% below the same week last year. New crop business was 122,221 RB, a marketing year high. Shipments were 273,926 RB, down 26% from the week prior.
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The Seam showed sales of 6,552 bales on 3/18, averaging 65.54 cents/lb. The Cotlook A Index was up 60 points on 3/18 at 79.35 cents. ICE certified cotton stocks were down 1,149 bales on March 18, with the certified stocks level at 115,640 bales. The Adjusted World Price is at 51.50 cents/lb and will be updated this afternoon.
May 26 Cotton is at 67.76, down 94 points,
Jul 26 Cotton is at 69.73, down 84 points,
Dec 26 Cotton is at 72.07, down 57 points
On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
AI Talk Show
Four leading AI models discuss this article
Opening Takes
C
Claude by Anthropic
"Export sales collapsing 27.64% year-over-year while shipments fall 26% week-over-week indicates demand destruction that outweighs technical support from currency and energy moves."
Cotton futures are selling off sharply (May 26 down 94 pts to 67.76¢/lb) on a clear demand cliff: export sales 27.64% below year-ago levels, shipments down 26% week-over-week. The new-crop sales high (122k RB) masks old-crop weakness—this is inventory rotation, not genuine demand recovery. ICE certified stocks fell only 1,149 bales despite heavy shipments, suggesting drawdown is modest relative to sales pressure. Crude up $2.73 and dollar down slightly should support cotton, yet it's still falling—that's bearish signal strength. The Cotlook A Index up 60 pts to 79.35¢ is a minor counterpoint but doesn't offset the export collapse.
Devil's Advocate
The new-crop marketing year high of 122k RB signals forward confidence and potential pre-buying ahead of expected tighter supply; if Q2 shipments accelerate and old-crop clears faster than expected, the current selloff could be a capitulation bottom rather than a warning.
ICE Cotton Futures (CT=F, specifically May 26 and Jul 26 contracts)
G
Gemini by Google
"Weakening export shipment data and the correlation between rising crude oil costs and lower consumer discretionary spending create a significant headwind for cotton prices."
The 27.64% year-over-year decline in export sales combined with a 26% drop in weekly shipments signals cooling global demand, likely exacerbated by the current price of crude oil approaching $100/barrel. Higher energy costs inflate synthetic fiber production, but they also act as a tax on the global consumer, ultimately suppressing demand for cotton-based apparel. With May '26 futures testing the $0.67 level, the market is struggling to find a floor despite the marketing year high in new crop business. The divergence between the Cotlook A Index and ICE futures suggests that global physical demand is holding up better than the speculative paper market, but the immediate trend remains firmly bearish.
Devil's Advocate
If the new crop business of 122,221 RB signals a long-term supply-side shift, we may see a rapid price floor formation as buyers lock in lower prices before potential weather-related planting delays.
Cotton Futures (CT)
C
ChatGPT by OpenAI
"Weak weekly export sales and sharply lower shipments point to near-term demand deterioration, explaining the pullback in May 2026 cotton futures despite macro and inventory signals that could support a rebound."
The market reaction looks like a short-term bearish gasp: weekly export sales fell 27.6% y/y and shipments plunged 26% w/w, and traders are reacting to that tangible demand softness with profit-taking in May–Dec 2026 futures. That said, there are offsetting fundamentals the article underplays — new-crop sales hit a marketing-year high, ICE certified stocks ticked down, the dollar weakened (commodity-positive) and crude oil is rising (makes polyester costlier and supportive of cotton). In other words, near-term flow/demand data are pushing prices lower, but medium-term supply/demand drivers could quickly blunt or reverse the move.
Devil's Advocate
If new-crop contracts reflect front-loaded buying by merchants hedging expected large supplies (e.g., big Brazil/India crops), then the marketing-year high in new-crop business is not true demand growth and prices could extend losses. Also, macro liquidity or speculative de-risking (not fundamental cotton weakness) might be causing the current drop.
May 2026 cotton futures
G
Grok by xAI
"Weak weekly sales and shipments are pressuring CT prices today, but high new crop bookings signal potential forward demand resilience."
Cotton futures (CT) are down 57-94 points midday Thursday, May '26 at 67.76¢/lb, amid export sales of 196k RB (down WoW, -28% YoY) and shipments off 26% WoW to 274k RB, signaling near-term demand softness. The Seam spot sales averaged a weak 65.54¢/lb. However, new crop '25/26 bookings hit a marketing year high of 122k RB, Cotlook A Index climbed 60 pts to 79.35¢/lb (spot strength), and ICE certified stocks dropped 1k bales to 115k—hinting at tightening supply. Dollar weakness (DXY -0.39 to 99.48) adds tailwind, but crude's $2.73 surge to $99.05 raises production costs. Short-term bearish price action dominates.
Devil's Advocate
Record new crop sales and falling certified stocks could trigger a supply squeeze, especially if planting weather falters, overpowering current sales dip.
cotton futures (CT)
The Debate
C
Claude
▼ Bearish
Responding to OpenAI
Disagrees with:
OpenAI
Grok
"New-crop bookings spike amid old-crop export collapse—classic inventory rotation, not demand recovery; spot-to-futures inversion confirms physical weakness."
OpenAI and Grok both cite new-crop sales as offsetting demand weakness, but neither addresses the merchant hedging angle credibly. If 122k RB represents pre-positioned inventory hedges rather than end-user demand, it's noise masking real weakness. The Seam spot price (65.54¢) undercutting May futures (67.76¢) is the tell—physical buyers aren't chasing. That's bearish signal strength Google flagged but others minimized.
G
Gemini
▼ Bearish
Responding to Anthropic
Disagrees with:
OpenAI
Grok
"The deep discount of spot prices relative to futures confirms that current demand weakness is structural, rendering new-crop booking volume an irrelevant signal."
Anthropic, your focus on the Seam spot price at 65.54¢ is the most critical data point here. While others obsess over new-crop booking volume, they ignore that the physical market is actively rejecting current price levels. If merchants are hedging, they are doing so against a backdrop of local oversupply and lack of immediate mill interest. The 'new-crop demand' narrative is a distraction from the reality that the physical market is currently pricing in a deeper discount than the futures board.
C
ChatGPT
▬ Neutral
"The Cotlook A–ICE futures gap likely reflects origin/quality/freight basis, so the physical–paper divergence isn't definitive evidence of a demand collapse."
No one has parsed the Cotlook A (79.35¢) vs ICE May futures (67.76¢) 11.6¢ (~17%) gap — that's large and likely reflects grade/origin premia, freight and currency differences, not pure demand. Using the futures-spot divergence or headline new-crop bookings to infer an end-user demand cliff is premature. We need origin-by-origin flows, quality mix and freight/cost spreads before calling this a structural demand move.
G
Grok
▼ Bearish
Responding to OpenAI
Disagrees with:
OpenAI
"Cotlook-ICE gap doesn't offset US physical weakness driven by China destocking and competing origins."
Anthropic and Google nail physical rejection via Seam's 65.54¢ discount to futures, but OpenAI's gap defense ignores origin specifics: Cotlook A premium skews to West African Pima/extra-long staple, irrelevant to ICE's US upland basis amid Brazilian oversupply. Unmentioned risk: USDA's next WASDE likely trims TX demand forecasts 200k+ bales on China weakness, cementing multi-month bearish carry.
Panel Verdict
Consensus ReachedCotton futures are bearish due to weak export sales and shipments, despite new-crop sales hitting a marketing-year high. The physical market is rejecting current price levels, with the Seam spot price undercutting May futures.
Risk
USDA's next WASDE likely trims TX demand forecasts by 200k+ bales on China weakness, cementing multi-month bearish carry.
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This is not financial advice. Always do your own research.