Cotton futures closed higher on Monday, August 18, 2026, with contracts gaining between 16 and 68 points across the board. The December 2026 contract settled at 85.48 cents per pound, up 68 points, while the October 2026 contract rose 47 points to 84.07 cents. The move came as the USDA’s weekly Crop Progress report showed a slight deterioration in crop conditions, lending support to prices.
USDA Report Shows Crop Conditions Slip
The USDA’s Crop Progress report, released Monday afternoon, pegged 74% of the U.S. cotton crop as setting bolls as of Sunday, with 14% of the crop having bolls opening. More notably, condition ratings fell to 38% good/excellent, down 2 percentage points from the prior week. The Brugler500 index, a proprietary scoring system that rates crop health on a 0–500 scale, dropped another 9 points to 310.
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The decline in condition ratings comes at a critical time in the growing season. With boll-setting underway across much of the Cotton Belt, any sustained stress from heat or dryness can directly impact yield potential. The market’s positive reaction suggests traders are beginning to factor in the possibility of a smaller harvest than earlier projections indicated.
Market Fundamentals and External Support
Monday’s gains were also supported by outside markets. Crude oil rose $2.55, which can influence cotton prices through its effect on synthetic fiber costs and transportation expenses. The U.S. dollar index fell 0.094, making U.S. cotton more competitive for foreign buyers.
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Meanwhile, the Cotlook A Index — a benchmark for world cotton prices — was down 90 points on Friday at 94.05 cents. ICE certified cotton stocks declined by 3,359 bales on August 14, bringing the certified stock level to 72,626 bales. The Seam reported just 74 bales sold at its August 14 auction, at an average price of 71 cents per pound.
In a separate update, the USDA raised the Adjusted World Price (AWP) by 190 points on Thursday to 68.19 cents per pound. The AWP is used to calculate marketing loan benefits and loan deficiency payments, so the increase is relevant for producers making sales decisions.
What to Watch as Harvest Approaches
With the crop moving into the boll-opening phase, the market’s focus will shift to weather forecasts over the next several weeks. The condition rating decline, while modest, is a reminder that the 2026 crop is not yet locked in. Traders will be watching the next few Crop Progress reports for any signs of further deterioration, as well as export sales data to gauge demand.
The certified stock decline also bears monitoring — a continued drawdown could tighten deliverable supplies and add a premium to nearby contracts. For now, the market appears to be finding support around the mid-80-cent level, with the December contract holding above its recent trading range.
As the growing season winds down, the balance between supply concerns and demand uncertainty will likely keep cotton prices range-bound, with condition ratings serving as a key short-term driver.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Commodity markets are volatile and involve substantial risk. Prices can move quickly in either direction, and past performance is not indicative of future results. Always conduct your own research or consult a licensed financial advisor before making trading decisions.
