On April 9, international cotton prices experienced a sharp surge; the ICE May cotton futures contract jumped 159 points in a single day, closing at 73.26 cents per pound—a cumulative increase of 3.26 cents since the end of March. The primary driver behind this robust rally is the continued deterioration of drought conditions in major U.S. cotton-producing regions. The core planting belt in Texas is now experiencing drought conditions classified as moderate or worse; this severe weather directly threatens the progress of new crop sowing and seedling emergence. Consequently, the market has cast strong doubts on the yield forecasts presented in the USDA's monthly report, leading to significantly heightened expectations of tightening supply and prompting capital to actively take long positions.

However, the USDA’s April Cotton Monthly Report—released on the same day—adopted a generally bearish tone, creating a distinct tug-of-war against the speculative sentiment driving market trading.

For the 2025/26 season, the global cotton production forecast has been revised upward by nearly 900,000 bales; specifically, production estimates for China, India, and Pakistan were each raised by 300,000 bales, while increases in other countries were limited.

Global consumption estimates were raised by approximately 560,000 bales, driven primarily by increased demand for textile cotton in China and India, though this gain was partially offset by downward revisions in usage for Bangladesh and Vietnam.

The trade sector has simultaneously shown signs of weakening, with global import forecasts lowered by 160,000 bales and export forecasts by 190,000 bales; the decline in exports was largely dragged down by reduced shipments from India.

Consequently, global ending stocks have been revised upward by over 650,000 bales, further highlighting a landscape of ample supply.

Regarding the domestic market, according to the SunSirs Commodity Market Analysis System, as of April 10, the spot price for Grade 3128B lint cotton stood at 16,721 RMB/ton, marking a slight increase of 0.1% compared to the previous day. Currently, the domestic spot cotton basis remains firm, providing support for futures prices. Although downstream textile enterprises have adopted a cautious procurement stance—and exhibit limited willingness to restock due to weakening order volumes—their operating rates have not seen any significant decline; consequently, rigid demand for cotton persists, thereby supporting the lower bound of cotton prices.

Overall, the international cotton market is currently locked in an intense tug-of-war between bullish speculation driven by weather concerns and bearish fundamentals highlighted in recent monthly reports; consequently, short-term market movements will continue to fluctuate in response to changing weather conditions in U.S. cotton-growing regions. Domestic cotton prices are tracking these external market trends while simultaneously maintaining a pattern of range-bound fluctuation, influenced by an interplay of conflicting factors—specifically, the support provided by rigid downstream demand versus the downward pressure exerted by weak order volumes.

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