SunSirs: USDA Report Was Bearish, Cotton Prices Fluctuated and Weakened

Price trend:

Cotton commercial inventories surged at the end of October, resulting in ample supply. Downstream demand weakened as the off-season began, coupled with the USDA's latest report increasing global cotton production, putting downward pressure on both domestic and international cotton prices. According to the SunSirs commodity market analysis system, as of November 17th, the spot price of grade 3128B cotton was 14,799 RMB/ton, a weekly decrease of 0.34%. The average settlement price of the Zhengzhou cotton futures main contract last week was 13,521 RMB/ton, down 48 RMB/ton from last week, a decrease of 0.4%.

Market Analysis

On the supply side: Cotton harvesting in Xinjiang was basically complete, with only a few remaining unharvested in southern Xinjiang. Increased production was essentially certain, and costs were fixed. With the concentrated entry of new cotton into the market, commercial inventories were showing a continuous upward trend. As of November 14, 2025, total commercial cotton inventory was 3.2824 million tons, an increase of 434,600 tons compared to the previous week. Regarding seed cotton, the average purchase price of hand-picked cotton last week was 6.86 RMB/kg, a decrease of 1.86% compared to the previous week. The average purchase price of machine-picked cotton was 6.14 RMB/kg, a decrease of 2.07% compared to the previous week.

Internationally: On November 14th, the USDA significantly raised its supply and demand forecasts for US and global cotton production and ending stocks. Affected by this, the ICE cotton futures March contract hit a new low. The week before last, the main US cotton contract switched to the March contract. The average weekly settlement price of the ICE cotton futures main contract was 64.92 cents/lb, up 0.07 cents/lb from the average weekly settlement price of the December contract, a rise of 0.1%.

According to the latest November global cotton supply and demand forecast report released by the U.S. Department of Agriculture (USDA), production, consumption, trade volume, and stocks had all increased compared to September. The global cotton production forecast for the 2025/26 season was 26.145 million tons, an increase of 523,000 tons month-on-month; global consumption was forecast at 25.883 million tons, an increase of 11,000 tons month-on-month; imports were 9.581 million tons, an increase of 63,000 tons month-on-month; exports were 9.58 million tons, an increase of 65,000 tons month-on-month; and global ending stocks were 16.532 million tons, an increase of 607,000 tons month-on-month. The report was bearish.

USDA November Global Cotton Monthly Report, Unit: 10,000 tons

On the demand side: The downstream market remained in a slow season, with domestic orders remaining weak. Although finished product inventory pressure was not yet significant, confidence in the future market was insufficient. The operating rate of grey fabric mills had begun to decline, and some yarn mills had also reduced their operations. Textile companies had limited incentive to actively replenish their inventories in the short term. However, export orders provided some short-term support and may offer some support to the market.

Market outlook

As of November 17, the cotton seed procurement was nearing its end, and costs had largely stabilized, providing a solid foundation for stable cotton prices. Despite ample supply and weak downstream demand, cotton prices still had downside support. It is expected that cotton prices will maintain a range-bound trading pattern in the short term, and future market movements will depend on changes in downstream demand and textile mill inventory levels.

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