Despite a short-lived jump in the middle of the month, cotton prices ended June $0.04 below May, according to the USDA’s Agricultural Marketing Service. The seven-market U.S. average spot price ended the month down 5 percent, at a price of a little over $0.75 per pound, close to the 52-week low of $0.73 at which it bottomed out in November.
Slow demand from China combined with a bumper crop of U.S. cotton this year were the major drivers of the price decline.
In China, where the government relaxed regulations governing the sale of cotton reserves, demand has been dropping due to seasonal sluggishness. Even sales of reserves have reportedly plummeted, as lower prices couldn’t compensate for the lack of demand, resulting in a growing stockpile of Chinese cotton.
Rain in Texas, the U.S.’s largest growing region, eased drought conditions. The USDA reported a 16 percent increase in supply, to 15 million bales which will result in larger-than-expected ending stocks for the current growing year.