Cotton prices extend losses on higher output forecast

ICE cotton futures extended their decline on Friday, weighed down by a stronger US dollar and a US Department of Agriculture (USDA) report projecting higher production and ending stocks of the natural fiber for the 2025/26 crop year, reports Reuters.

Cotton contracts for December fell 0.36 cent, or 0.5%, to 67.37 cents per lb by 12:30 a.m. ET (1630 GMT). The contract was down 1.7% so far for the week.

The dollar edged up 0.2%. A stronger dollar makes greenback-priced cotton more expensive for overseas buyers.

In its July World Agriculture Supply and Demand Estimates (WASDE) report, the USDA forecast 2025/26 ending stocks at 4.6 million, up 300,000 bales from last month, while its production forecast was increased by 600,000 bales to 14.6 million, above the 14.4 million bales produced last year.

"The acreage increase causing the increased production estimate with no change in demand, and (they're) adding to ending stocks, so it's a neutral to negative report," said Jack Scoville, vice president at Price Futures Group.

Meanwhile, global equity markets were lower as the market's recent optimism was hemmed in by rising trade tensions following US President Donald Trump's announcement of tariffs on imports fromCanada.

Trump said the US would impose a 35% tariff on Canada next month and planned to impose blanket tariffs of 15% or 20% on most other trading partners.