ICE Cotton showed a bearish trend yesterday due to slowing demand and weak external factors. US cotton again hit a one-month low but did not see a sharp decline and is supported at the 70 cents level. The US cotton crop is looking good, with harvest starting in several coastal regions of the country.
December ICE cotton contracts fell yesterday to settle at 70.62 cents per pound, down from a one-month low of 70.06 cents. The March 2025 contract slid 11 points to 72.51 cents.
ICE cotton was bearish due to slowing demand and weak external factors. U.S. cotton hit a one-month low but found support at 70 cents. The dollar index rose, making cotton more expensive for overseas buyers, while falling crude oil prices made polyester cheaper. Cotton futures open interest increased for the 13th consecutive session.
The dollar index rose in thin trading on Monday, settling above the 104 level, trade analysts said. President Joe Biden’s withdrawal from his reelection campaign added to volatility in currency markets. A stronger dollar made cotton purchases more expensive for overseas buyers. Crude oil prices fell for a second straight day, dropping to their lowest in more than a month, as investors focused on rising inventories and weakening demand. Lower crude oil prices pushed down the price of polyester, a cotton substitute.
The dollar index rose on Monday despite thin trading, settling above the 104 level. President Joe Biden’s withdrawal from his reelection campaign led to increased volatility in the currency market. The stronger dollar made cotton more expensive for overseas buyers. Meanwhile, crude oil prices continued to fall for a second straight day, hitting a one-month low. Investors focused on rising inventories and weakening demand, which led to the drop in crude oil prices. The decline also pushed down the price of polyester, a cotton substitute, according to trade analysts.
Cotton futures trading volume was relatively light at 21,110 contracts on Monday compared to 22,504 contracts on Friday. Open interest has increased for the 13th consecutive day, increasing a total of 11,939 contracts from a 2.5-month low of 208,683 contracts on July 1. As of today, open interest is at 220,622 contracts, up 768 contracts from Friday.
As of July 19, deliverable stocks of the second cotton futures contract stood at 40,419 bales, down from 41,122 bales the previous trading day, according to ICE data. The U.S. Commodity Futures Trading Commission (CFTC) reported that cotton speculators reduced their net short positions by 631 lots to 44,491 bales in the week ended July 16.
A report released yesterday showed that conditions for the cotton crop have improved significantly: According to the USDA Crop Report, 53% of the U.S. cotton crop was rated “good” to “excellent” as of July 21, up from 45% the previous week and 46% at the same time last year.
On Tuesday, the December 2024 ICE cotton contract rose 0.12 cents to trade at 70.74 cents per pound. Cash cotton was trading at 65.13 cents (up 0.15 cents), the October contract at 70.64 cents (up 0.51 cents), the March 2025 contract at 72.64 cents (up 0.13 cents), the May 2025 contract at 74.02 cents (up 0.12 cents), and the July 2025 contract at 74.89 cents (up 0.10 cents). Several contracts remained at the previous day’s closing levels and no transactions were recorded today.
Fibre2Fashion News Desk (KUL)
