ICE cotton futures faced profit booking despite strong US cotton export sales. ICE cotton ended a three-day rally on Thursday with a drop of 38 to 64 points across various contracts. The weakness in crude oil also dampened market sentiments in the cotton trade. Brazil’s cotton production is expected to rise in the current season, according to the latest estimates.
Yesterday, the ICE cotton May 2025 contract settled at 67.98 cents per pound (0.453 kg), down by 0.59 cents. Other contracts lost between 38 and 64 points yesterday.
Brazil's cotton output is expected to rise, buoyed by higher planting areas.
Market sentiments were affected by falling oil prices and geopolitical events, yet long-term demand remains strong.
Current trading shows varied price changes in different contracts.
Falling oil prices pressured cotton, making polyester—a man-made cotton substitute—cheaper. Crude oil dropped sharply due to Russia-Ukraine peace talks and rising US crude oil inventories.
The market volume was 87,331 contracts, with 93,199 contracts cleared the previous day, indicating strong trading activity.
Despite a strong USDA weekly export report, profit-taking led to a decline. Net export sales were 244,700 bales, up 30 per cent from last week but down 14 per cent from the four-week average.
Brazil’s 2024-25 cotton production is projected to be 1.6 per cent higher at 3.7616 million tons, and the cotton planting area expanded by 4.8 per cent to 2.0369 million hectares, indicating strong supply potential.
Cotton prices hovered 220 points higher than the lows of two to three weeks ago. The demand has improved, and the market has witnessed profit booking at higher prices.
US equities and grains traded higher but failed to lift cotton futures. The delay in US tariffs reduced fears of a trade war, stabilising global markets.
Despite the decline, long-term cotton demand remains strong, backed by steady US exports, improving global trade, and resilient pricing trends.
Currently, ICE cotton for March 2025 is trading at 67.23 cents per pound (up 0.40 cent). Cash cotton is trading at 64.83 cents (down 0.64 cent), the May 2024 contract at 68.37 cents per pound (up 0.39 cent), the July 2025 contract at 69.25 cents (up 0.37 cent), the October 2025 contract at 69.46 cents (down 0.39 cent), and the December 2025 contract at 69.52 cents (up 0.37 cents). A few contracts remained at the level of the last closing, with no trading noted today.
Fibre2Fashion News Desk (KUL)