Yesterday, the ICE cotton December contract settled at 72.08 cents per pound (0.453 kg), down by 0.12 cents. The contract traded within a range of 70.16 to 74.55 cents over the past five weeks, moving a total of 439 points during this period.
ICE cotton prices dipped due to profit booking and a stronger US dollar, which made cotton more expensive for overseas buyers.
Despite the rise in crude oil prices, cotton prices remained under pressure.
Speculative trading and subdued global demand, especially from China, contributed to the decline.
Traders are now focused on the upcoming USDA export sales report for further market direction.
The US dollar index reached its highest point in over two months, making US cotton less competitive globally, as the cost of purchasing cotton increased for overseas buyers. However, the rise in crude oil, which surpassed $72 per barrel, helped limit the fall in US cotton prices. Crude oil has fluctuated between $68.69 and $78.46 over the past two weeks.
Trading volume dropped significantly to 38,600 contracts, down from 49,945 in the previous session. Total open interest decreased by 452 contracts to 258,109, marking the first decline after eight consecutive sessions of gains.
The decline in US cotton prices was attributed to speculative trading. Global demand remains subdued, especially in the absence of significant cotton purchases from China. Profit-taking was observed following the previous day’s rally. US equities were mixed but ended the session nearly unchanged.
Traders are now closely watching the USDA’s weekly export sales report, due on Thursday, for additional market cues.
At present, ICE cotton for December 2024 is trading at 72.21 cents per pound, up by 0.13 cent. Cash cotton is trading at 67.08 cents (down 0.12 cent), the March 2025 contract at 74.18 cents per pound (up 0.14 cent), the May 2025 contract at 75.41 cents (unchanged), the July 2025 contract at 76.34 cents (down 0.03 cent), and the October 2025 contract at 74.71 cents (unchanged). Some contracts remained at their last closing levels, with no trading activity reported today.
Fibre2Fashion News Desk (KUL)
