ICE cotton rebounds; gains limited by rising dollar & weak crude oil

The most traded May contract remained volatile and touched a high of 84.27 cents per pound (0.453 kg). However, a stronger dollar pulled it down. Now, the major focus has shifted toward the July contract, which traded between 84.43 cents and 84.20 cents.

The US dollar index rose again and reached above 106 levels but settled at 105.9. A stronger dollar made cotton buying expensive for foreign buyers. Crude oil also lowered, which was another dampening factor for cotton.

Analysts say the trade was focusing on geopolitical developments, US export sales, and sowing progress. From a weather perspective, the coming weeks will be very crucial for US cotton sowing.

ICE cotton noted a trade volume of 52,667 contracts, which was the lowest in the last two weeks. The market saw a high volume, averaging at 75,069 contracts over the last nine sessions. Certified stocks started at 166,190 bales, up 6,811 bales added in ICE cotton exchanges, with 261 bales awaiting review. Open interest dropped for eight consecutive sessions, down 12,095 contracts on Friday, starting today at 212,549 contracts, the lowest since January 18.

During today's session, ICE cotton May 2024 was traded 0.31 cent higher at 83.35 cents per pound. Meanwhile, cash was traded at 79.43 cents (0.31 cent), July 2024 at 85.46 cents (0.31 cent), the October (new crop) contract at 81.56 cents (0.62 cent), the December 2024 contract at 80.63 cents (0.08 cent), and March 2025 at 80.63 cents per pound (0.08 cent).

Fibre2Fashion News Desk (KUL)