Yesterday, the ICE cotton December contract settled at 71.03 cents per pound (0.453 kg), down by 0.41 cents, after touching a low of 70.55 cents—its lowest level since September 18.
ICE cotton prices declined due to a stronger US dollar and weaker commodity prices like crude oil, which made cotton purchases more expensive and polyester cheaper.
However, cotton futures rebounded slightly.
Lower corn and soybean prices, along with favourable weather and expectations of a strong US cotton harvest, added pressure.
Traders expect demand near 70 cents per pound.
The US dollar index has strengthened over the past three weeks, though it remained relatively stable on Tuesday. Overseas cotton buyers were discouraged by the higher cost of purchases in their local currencies. Crude oil prices fell by over 4 per cent, reaching a two-week low. Reports that Israel would not target Iranian oil or nuclear facilities eased concerns about supply disruptions, leading to further declines in oil prices globally. The fall in crude oil made polyester, a man-made alternative to cotton, cheaper.
On October 15, 30,813 cotton contracts were traded, while 40,394 contracts were cleared the previous day. ICE’s No. 2 cotton futures contract inventory dropped to 174 bales as of October 14, down from 265 bales on the prior trading day.
The weakness in corn and soybean prices, which fell for the fourth consecutive session, also exerted pressure on cotton. Favourable weather in Brazil and expectations of a bumper US harvest shifted market sentiment towards ample global supplies.
There has been some cotton demand around 70 cents per pound. Traders are anticipating improved demand at this price level following the recent 4-cent drop. They are awaiting the USDA’s weekly export sales report on Thursday to assess US cotton demand.
The USDA’s weekly crop report, released after market close on October 15, showed US cotton quality at 34 per cent, up from 29 per cent the previous week and 30 per cent during the same period last year. As of October 13, 34 per cent of the US cotton crop had been harvested, compared to 26 per cent the previous week, 31 per cent at the same time last year, and a five-year average of 30 per cent.
Currently, ICE cotton for December 2024 is trading at 71.05 cents per pound, up 0.43 cent. Cash cotton traded at 65.12 cents (down 0.41 cent), while the March 2025 contract stood at 73.21 cents per pound (up 0.46 cent), the May 2025 contract at 74.70 cents (up 0.49 cent), the July 2025 contract at 75.60 cents (up 0.47 cent), and the October 2025 contract at 73.36 cents (down 0.46 cent). A few contracts remained unchanged from the last closing, with no trading recorded today.
Fibre2Fashion News Desk (KUL)
