Cotton QuickTake July 20, 2026

After a busy stretch of major reports, this week's economic calendar slows down. That means the market's attention will shift toward weather, export demand, geopolitical developments, and trader positioning ahead of next week's Federal Reserve meeting.

AI-assisted narration and summarization based on original reporting and data from PCCA.

Transcript

SPEAKER_01 0:00

Welcome to Cotton Quick Take by PCCA, your short weekly update on the factors shaping cotton markets and the broader agricultural economy. Thanks for joining us. Let's take a quick look at what's moving the market this week. After a busy stretch of major reports, this week's economic calendar slows down. That means the market's attention will shift toward weather, export demand, geopolitical developments, and trader positioning ahead of next week's Federal Reserve meeting. Last week, December cotton futures settled at 78.63 cents per pound, down nearly 3 cents from the previous week. While crude oil prices offered occasional support, the market ultimately turned its focus back to demand. China's decision to begin selling cotton from its state reserves, weaker than expected export sales, and profit taking by speculative funds all contributed to the pullback.

SPEAKER_02 0:48

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SPEAKER_01 1:06

Weather continues to be one of the biggest stories. Recent rainfall helped ease drought conditions across parts of West Texas, with the share of the cotton belt experiencing drought dropping from 55 to 46%. However, forecasts are once again calling for hot and dry conditions, making crop development a key factor to watch in the weeks ahead. On the macro side, softer inflation data increased expectations that the Federal Reserve will leave interest rates unchanged at its next meeting. But renewed conflict between the US and Iran has pushed crude oil prices higher, creating fresh uncertainty for commodity markets. Higher energy prices can make cotton more competitive with polyester, but they can also strengthen the U.S. dollar and weigh on overall demand. PCCA Vice President of Marketing, Keith Lucas, said the resurgent conflict between the U.S. and Iran is a double-edged sword for cotton.

SPEAKER_00 1:59

The conflict with Iran has once again brought uncertainty for commodities. With the new round of fighting, crude oil is higher, which can help somewhat making cotton more competitive with polyester, but also can lead to higher gas prices and higher inflation, reducing the discretionary income for consumers.

SPEAKER_01 2:17

Finally, export sales fell to a marketing year low last week, although export shipments remain steady. As we approach the end of the marketing year, traders will be looking for stronger demand signals in Thursday's export sales report, followed by Friday's Commitments of Traders Report to see how speculative fund activity is evolving. Thanks for listening to Cotton Quick Take by PCCA. Be sure to join us next week for another quick update on the markets and the stories shaping the cotton industry.