Cotton Price Today

ICE cotton futures — officially the Cotton No. 2 contract (ticker symbol CT) — are the global benchmark for upland cotton pricing. Each contract represents 50,000 pounds (approximately 100 bales) and is quoted in cents per pound. A quote of 72.50 means $0.725 per pound, or $36,250 per contract. Cotton trades on five contract months: March, May, July, October, and December. Electronic trading on ICE runs nearly around the clock, with the December contract serving as the primary new-crop pricing reference for U.S. producers.

Beyond the ICE futures market, the Cotlook A Index provides the benchmark for international cotton pricing. Published daily by Cotlook Ltd. in Liverpool, the A Index is an average of the five lowest offers from a selection of internationally traded growths, delivered to Far East ports. The spread between ICE futures and the Cotlook A Index reflects U.S. export competitiveness relative to cotton from Brazil, India, Australia, and West Africa. For U.S. producers, this spread directly affects the Adjusted World Price (AWP) that determines marketing loan benefits.

Cotton pricing at the gin level starts with the nearby ICE futures price, then adjusts for quality premiums or discounts based on USDA classing results. USDA classing offices evaluate every bale produced in the United States on several quality parameters: staple length (fiber length), micronaire (fiber fineness and maturity), strength (measured in grams per tex), color grade, leaf content, and uniformity. Higher-quality cotton — long staple, good micronaire in the 3.5 to 4.9 range, and high strength — commands premiums over base grade. Cotton stressed by drought often produces shorter staple and elevated micronaire, resulting in significant discounts.

The U.S. Cotton Belt stretches from the Southern Plains through the Southeast, with production concentrated in several key states. Dryland cotton acres across these regions are highly weather-dependent, making regional conditions critical to price movements. The USDA marketing loan program provides a price floor through the loan rate, currently set at 52 cents per pound for base quality. When market prices fall below the Adjusted World Price, producers can receive Loan Deficiency Payments (LDPs) or benefit from marketing loan gains. Understanding the relationship between your gin price, the futures market, and the loan rate is essential for making sound marketing decisions.

U.S. cotton production typically ranges from 14 to 17 million 480-pound bales annually, making the United States one of the world's top three producers alongside China and India. However, the U.S. exports the majority of its crop — roughly 75 to 85% — making export demand the most critical demand driver for American cotton growers. China is the world's largest cotton consumer and importer, and shifts in Chinese buying patterns have an outsized effect on global prices.

Competition from polyester and other synthetic fibers is a long-term structural factor in cotton demand. Synthetics now account for roughly 65% of global fiber consumption, and cotton must compete on both price and performance. Mill demand indicators — particularly the USDA on-call reports, which show the volume of cotton that has been committed but not yet priced against futures — provide insight into upcoming demand for futures contracts. Certified stocks on ICE, representing cotton that has been inspected and is available for delivery against futures contracts, influence nearby contract pricing and the spread between nearby and deferred months.

Cotton marketing differs from grain marketing in several important ways. Most U.S. cotton is marketed through cooperative gins or independent merchants rather than at elevators. The USDA marketing loan program provides a significant safety net: producers can place cotton under a Commodity Credit Corporation loan at the base loan rate and later repay at the lower of the loan rate or the Adjusted World Price, capturing a marketing loan gain. Loan Deficiency Payments (LDPs) offer an alternative for producers who do not want to put cotton under loan.

Forward contracting through gins and merchants typically begins well before planting. Producers can lock in a futures price through forward contracts, with final settlement adjusted for quality premiums and discounts after classing. Pool marketing through cooperatives allows producers to share price risk across the marketing year. Some producers use options strategies on ICE to establish price floors while retaining upside potential. The best marketing approach depends on individual risk tolerance, production costs, and expectations about the direction of the market.