U.S. Cotton Rate Faces Downward Pressure as Week Closes Out

The cotton futures market wrapped up the short trading week with bearish sentiment across the board. March contracts experienced the most significant decline, dropping 48 points throughout the five-day period, while nearby months fell more moderately—May futures shed 23 points and July retreated 11 points. March delivery settled at 64.01 cents/lb, with May and July closing at 65.37 and 66.72 cents/lb respectively.

Supporting the decline, crude oil futures weakened 9 cents to close at $57.41 per barrel, while the U.S. dollar index gained $0.123 to reach $98.170, both factors contributing to softer commodity pricing overall.

Government Support Programs Impact Cotton Market Dynamics

The USDA unveiled details for its Farm Bridge Assistance program on Wednesday afternoon, announcing a cotton payment rate of $117.35 per acre. This government intervention reflects ongoing efforts to support domestic cotton producers navigating volatile market conditions. The announcement came as trading activity continued at The Seam’s online auction, where 17,479 bales traded on December 31 at an average price of 65.40 cents/lb.

Key Market Indicators and Price Benchmarks

The Cotlook A Index maintained its level at 74.30 cents on Wednesday with no movement recorded. Meanwhile, the Adjusted World Price was updated Friday morning to 50.76 cents/lb, representing a 74-point increase from the previous week—a positive signal amid broader market weakness. ICE certified cotton stocks held steady at 11,510 bales as of the end of year.

For domestic growers, the LDP (Loan Deficiency Payment) rate currently stands at 1.24 cents, providing additional support as the U.S. cotton rate remains under pressure from multiple market headwinds.