Cotton rebounds as tariff panic fades, December futures eye 75 cents

Cotton prices have rebounded after weeks of volatility triggered by tariff confusion and market misinterpretation. The nearby May contract closed above 63 cents, a key support level, signaling a return to stability.

While cotton touched this low again, contrary to earlier expectations, the pullback was largely due to misguided fears around US tariff policies and the cotton industry's weak consumer engagement. December futures, currently at 67 cents, are trending higher, with expectations to regain the 69-71 cent range.

The broader market chaos driven by Wall Street's tariff anxieties echoed the warnings of veteran trader Paul Tudor Jones, who predicted a meltdown months ago. Still, the cotton market was already vulnerable. Reports indicated sluggish yarn sales, with up to 50 per cent of mills operating below capacity. Bearish signals from on-call sales and excessive speculative shorts further pressured prices.

Despite this, USDA’s Prospective Plantings report estimated 2025 US cotton acreage at 9.87 million, slightly below expectations due to slow seed sales. Global planting intentions are also lower than forecast, supporting a potential rally. If fundamentals improve, December 2025 cotton futures may rise toward 75 cents. A short-covering rally could push near-term prices into the low 70s.