Key Highlights

● Cotton edged up 0.11% to 80.09 US cents a pound in Monday's session.

● USDA raised US 2026/27 production to 13.44 million bales, lifting ending stocks to 3.80 million.

● Weekly net upland export sales were 146,900 running bales, described as weak.

● Gildan lists cotton and polyester as primary raw materials and hedges cotton ahead of delivery.

Cotton futures rose 0.11% to 80.09 US cents a pound in Monday's session on 19 October, barely above Friday's settlement of 80.00 cents. A market pinned near 80 cents matters to apparel makers such as Gildan Activewear (NYSE:GIL), which lists cotton and polyester as its primary raw materials.

ICE Futures US December 2026 cotton (CTZ26) settled at 80.00 US cents a pound on Friday 16 October, down 0.06 cents. December is the most active contract. On Thursday 15 October it settled at 80.06 cents, down 0.60 cents from 80.66, after trading between 79.70 and 80.77 cents. That sits near the bottom of an eight-session range of 79.23 to 82.25 cents.

Later months trade higher: on 15 October, March 2027 settled at 83.42 cents and May at 85.12 cents, so the curve rises through the season. Cotton is down 0.69% on the week and 4.05% on the month, but up 24.54% year to date and 24.75% from a year ago. In September prices fell below 80 cents as new-crop supplies grew and demand from China was weak.

More Cotton, Fewer Buyers

The central tension is simple. Supply estimates keep rising while demand stays slow. The bigger crop and heavier stocks cap prices, and the weak export and mill numbers give buyers little reason to chase them.

The USDA Adds Supply

The October WASDE raised US 2026/27 production to 13.44 million 480-lb bales, up 0.24 million from September. US exports were unchanged at 12.30 million bales, so projected ending stocks rose by 0.20 million to 3.80 million bales. The season-average farm price was trimmed to 77.0 cents from 78.0.

The world picture is similar. Global production was lifted by 0.63 million bales to 117.95 million, consumption by only 0.16 million to 123.08 million, and ending stocks by 0.82 million to 70.68 million bales. Consumption still exceeds production, so stocks are projected to fall over the season, yet the October revision pointed to more supply, not less.

Harvest and Weather

Harvest is a seasonal source of pressure. By 11 October it was 2% ahead of the five-year average, and 34% of the national crop was rated good to excellent, which indicates a mixed crop. In the Mid-South and Delta, Louisiana was 64% harvested and Mississippi 57%, and better weather in Texas has improved harvest conditions, which increases physical supply.

Weather has also complicated the picture. The USDA says remnants of a hurricane brought one to five inches of rain to the Florida Panhandle and Alabama, delaying defoliation and harvest. Western and central Oklahoma had more than ten inches, and hail and thunderstorms slowed harvest in West Texas and Kansas. Rain across the belt is more likely to have hurt grades than yields, and rain-damaged cotton can attract discounts.

Demand Is the Weaker Leg

Weekly net upland export sales for the week ended 1 October were 146,900 running bales, down on the prior week and described as weak, with shipments below the USDA's season target. The USDA's mill commentary said domestic buyers in the Southeast made moderate inquiries for fourth-quarter and 2027 delivery but placed no sales, with finished-goods demand slow. Foreign mill inquiries in the Southwest were light, mainly from Pakistan and Vietnam.

There are a few supportive signs. Certificated stocks have fallen to 17,756 bales as of 15 October, which is read as improving commercial demand, and unfixed call sales have risen above unfixed call purchases. In the week to 13 October, hedge funds liquidated 3,665 long positions and covered 1,185 shorts.

What Cotton Means for Gildan

Cotton producers, merchants and spinners are mostly private or listed outside the United States, so listed exposure is thin and sits mostly on the consumer side. Gildan is a vertically integrated maker of basic apparel and a consumer of cotton, not a producer.

Its first-quarter 2026 filing states that it buys contracts and derivatives ahead of delivery to lock in cotton costs for its yarn, and that realised cotton costs can still vary materially between reporting periods. The first quarter included the HanesBrands business, acquired on 1 December 2025, and net debt leverage of 3.3 times, above its target range. Lower cotton is a cost tailwind in principle, but hedging delays the benefit and weak consumer demand could offset it.

Cotton Watch: Export Sales, Harvest Data and First Notice Day

The weekly USDA export sales report on Thursdays, Monday's crop progress data on harvest, condition and defoliation, and Friday's CFTC positioning data are the regular guides, along with further rain across Texas and the Southeast. December's first notice day is reported as 23 November. Prices could firm on further crop-quality damage from rain, an improvement in export sales, falling certificated stocks or renewed fund buying. They could weaken on faster harvest progress, the larger USDA supply numbers, record Brazilian exports, weaker demand from China, slow mill buying, or softness in other farm markets, with soybeans at a seven-week low on 15 October. Gildan's next quarterly results will show how cotton costs are feeding through.