Cotton futures staged a partial recovery from early limit losses by midday on Friday, May 15, 2026, as traders weighed mixed signals from the latest U.S.-China trade discussions and updated export data. The nearby July contract was trading at 80.13 cents per pound, down 381 points, after touching the daily limit earlier in the session. December and March 2027 contracts also posted significant losses, falling 287 and 281 points respectively.
Trade Talks Leave Market Hanging
Few concrete details emerged from the meeting between President Donald Trump and China’s President Xi Jinping, leaving commodity markets in a state of uncertainty. President Trump stated early Friday that U.S. farmers would be ‘very happy’ with the trade deals being negotiated with China, but provided no specifics on tariff reductions, purchase commitments, or timelines. The lack of clarity weighed heavily on cotton prices, which had already been under pressure from a stronger U.S. dollar and mixed export data.
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USDA Export Sales Report Shows Lagging Pace
According to the U.S. Department of Agriculture’s Export Sales report released Thursday, total U.S. cotton export business stood at 10.863 million running bales (RB) as of the latest reporting week. That figure represents 97% of the USDA’s full-season forecast, trailing the five-year average sales pace of 105%. Export shipments reached 71% of the USDA forecast, also behind the 73% average pace. The data suggests that while demand remains steady, it has not accelerated enough to meet the government’s optimistic projections.
Market Fundamentals and Price Support Levels
The Cotlook A Index, a benchmark for world cotton prices, rose 50 points on Thursday to 96.65 cents per pound, indicating firm global demand. However, the Adjusted World Price (AWP) increased by 228 points to 71.87 cents per pound, which could reduce the competitiveness of U.S. cotton in international markets. ICE certified cotton stocks rose by 6,670 bales on May 14, reaching 193,114 bales, adding to the supply-side pressure.
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On the cash market, The Seam reported sales of just 6 bales on May 14 at an average price of 60 cents per pound, a negligible volume that reflects the cautious stance of buyers amid the uncertain trade outlook.
Broader Market Context
The U.S. dollar index was 0.407 points higher at 98.135, making dollar-denominated commodities more expensive for foreign buyers and adding headwinds to cotton exports. Meanwhile, crude oil prices rose $4.01 to $105.18 per barrel at midday, providing some support to the broader commodity complex but not enough to lift cotton from its intraday lows.
Why This Matters for Traders and Farmers
The cotton market is at a critical juncture. The combination of a stronger dollar, lagging export sales, and unresolved trade negotiations creates a fragile environment for prices. For U.S. cotton farmers, the next few weeks are essential as they prepare for the 2026/27 planting season and look for price signals to guide their marketing decisions. For traders, the ability of the July contract to hold above the 80-cent level will be a key technical indicator in the sessions ahead.
Conclusion
Cotton futures showed resilience by bouncing off limit losses at midday, but the market remains under pressure from trade uncertainty, a stronger dollar, and mixed export data. Until more clarity emerges from U.S.-China trade talks, cotton prices are likely to remain volatile, with the 80-cent level serving as a key support zone for the nearby contract.
FAQs
Q1: What caused cotton futures to drop sharply on May 15, 2026?
The drop was driven by a combination of a stronger U.S. dollar, lack of specific details from the U.S.-China trade meeting, and lagging USDA export sales data that fell behind the average pace.
Q2: What is the significance of the 80-cent level for July cotton?
The 80-cent level is a key psychological and technical support point. If the July contract closes below that level, it could signal further downside risk. The fact that it bounced off limit losses suggests buyers are defending that level.
Q3: How does the USDA Export Sales report affect cotton prices?
The report provides a weekly snapshot of U.S. cotton export commitments and shipments. When sales or shipments lag behind the USDA’s forecast or historical averages, it can signal weaker demand and pressure prices lower, as seen this week.
