Key Highlights

● Cotton futures rose 0.41% to 78.47 US cents a pound in Thursday's session.

● The US harvest was 52% complete on 25 October, above the 45% five-year average.

● China's cotton imports fell 42.6% year on year in September.

● USDA sees 2026/27 US ending stocks at 3.8 million bales.

Cotton futures rose 0.41% to 78.47 US cents a pound in Thursday's session on 29 October, a small gain that leaves the market close to a three-month low. Prices have slipped below 80 cents as harvest supplies build, even though the annual supply balance looks tighter than last year.

The bounce still leaves cotton down 2.94% on the week and 0.14% on the month. Over longer periods prices remain well above last year: they are up 22.00% so far in 2026 and 20.41% from a year ago.

Harvest Pressure Against a Tighter Annual Balance

Cotton is trading on a short-term story and a long-term story that do not agree. In the short term, the crop is coming in fast, competition from Brazil is growing and Chinese buying is weak. Over the season as a whole, world stocks are projected to fall.

A Fast Harvest Brings Supply

The US harvest was 52% complete on 25 October, up from 41% a week earlier and above the five-year average of 45%. Peak harvest typically presses on prices as new supplies reach the market. Crop conditions are modest, with 33% rated good to excellent, down from 35%, and dry conditions have been reported in Texas, the Delta and the Southeast.

ICE certificated stocks rose by 3,143 bales to 27,865, a small addition that points the same way.

Brazil and China Shape Demand

Seasonal supply pressure is compounded by export competition. Brazil, the world's leading cotton exporter, is expected to ship around 3.4 million tonnes, according to the Brazilian cotton producers' association Anea, compared with the USDA's US export forecast of 2.69 million tonnes.

China, meanwhile, has scaled back foreign purchases while US-China trade talks have yet to deliver clear tariff relief. China's cotton imports fell 42.6% year on year in September. In contrast, India is expected to extend duty-free cotton imports through December amid tight domestic supplies, which supports demand.

What the USDA Balance Shows

The USDA's October outlook gives the broader frame. It projects 2026/27 US production at 13.4 million bales, 455,000 below the previous year, and exports at 12.3 million. Ending stocks are put at 3.8 million bales, a stocks-to-use ratio of 28%, and the season-average upland farm price at 77 cents, about 15 cents above the prior season.

Globally, production is projected at 118.0 million bales, down 3.4%, against mill use of 123.1 million, up 1.9%. World ending stocks fall by 5.0 million bales to 70.7 million, with China holding about 34.7 million bales, roughly 49% of the world total. Brazil is forecast to produce a record 19.0 million bales and export a record 16.0 million.

Those figures show a market that is not oversupplied in a headline sense. They also show why Brazilian competition and Chinese buying matter: prices can fall on harvest pace even when the annual balance is tighter.

Mills, Merchants and Growers

Cotton exposure sits with growers, merchants, textile mills and apparel makers, and it works differently along the chain. Growers and merchants gain from higher prices, while mills and apparel makers see raw material costs rise. Lower cotton prices can ease input costs for basic apparel with a lag, depending on inventories and forward purchases, but selling prices and demand also matter.

Cotton Watch: Crop Progress, Export Sales and First Notice Day

The weekly USDA crop progress report, including the pace of picking and condition ratings, and weekly export sales are the main near-term guides, together with ICE certificated stocks. First notice day for December is 23 November, and the next USDA world supply and demand update is on 10 November. Futures are also moving between contract months, which can distort the front-month chart.

Prices could find support from smaller US yields as harvest results come in, from dry weather in producing regions, from firmer crude oil, which raises polyester costs, or from confirmed Indian import duty relief. Weakness could extend if harvest keeps running ahead of average, if certificated stocks keep rising, if Brazil ships heavily or if Chinese demand stays soft.