FX.co ★ Cotton Futures at Near 2-Month High

Cotton futures have surged beyond 64.5 cents per pound, marking their highest level since early November. This increase is attributed to a confluence of factors, including short covering, a softer dollar, and higher oil prices, which render the cotton alternative, polyester, more costly. The demand for natural fiber is also on the rise, contributing to the price uptick. According to the USDA's most recent weekly export sales report, released on December 23, net export sales amounted to 304,700 running bales for the current year as of the week ending December 11, significantly higher than the previous week's 153,300 bales. The subsequent report is expected on December 31. Concurrently, the National Bureau of Statistics reports that China's cotton output increased by 7.7% year-on-year, reaching 6.641 million metric tons in 2025. Nevertheless, the USDA's December 2025 World Agricultural Supply and Demand Estimates report predicts a subdued global cotton outlook for the 2025/26 season, with reductions in production, consumption, and exports. The projection for global cotton production in 2025/26 has been decreased by nearly 300,000 bales, resulting in an estimate of 119.79 million bales.