Supply prospects are tightening, with New York cotton futures prices soaring to their highest level since December 2024.

New York cotton futures prices surged significantly, reaching their highest level since December 2024, as traders weigh the preliminary planting area report from the US Department of Agriculture (USDA) against expectations of tightening global supply this year. The most active contract rose 1.4% to 71.93 cents per pound at one point. The USDA's intention planting area data released last week showed that the intended cotton planting area in the US was higher than expected, but given the current drought conditions in the US, this estimate scenario is considered overly optimistic. Commodity brokerage Artigas do Brasil stated in a report last Friday: "From historical experience, the actual planting area data from the USDA often deviates significantly from the initial estimates, which could cause a strong market reaction in either direction." On Wednesday, cotton futures saw their biggest single-day drop since October 30 last year, before recovering most of the lost ground, as the higher-than-expected planting area data caught the market by surprise. Previously, the market expected adverse weather and price weakness to suppress planting, putting short-term pressure on the market. StoneX market intelligence analyst Raphael Bulascoschi said: "The market has some concerns about US crops and realizes that other major players in global markets such as Brazil, China, and Australia are also reducing production. Therefore, the market is adjusting to the prospect of tightening supply and demand balance." In other soft commodity markets, New York Arabica coffee futures rose 1.2% to $2.990 per pound at one point. StoneX expects a 10 million bag surplus in global coffee supply this year, the largest since 2020.