Yesterday, the ICE cotton December contract settled at 72.16 cents per pound (0.453 kg), down by 0.66 cents. It had reached an intraday high of 72.99 cents, the highest level since July 14.

The dollar index rose by 0.1 per cent ahead of the Federal Reserve meeting. A stronger dollar makes cotton purchases more expensive for overseas buyers, adding pressure on demand. However, crude oil prices continued to rise, increasing the cost of polyester, a cotton alternative.

Open interest in cotton futures remained unchanged. Farmers are ready to sell cotton at higher levels, as short covering by speculators could drive prices upwards.

The US Department of Agriculture (USDA) reported that the quality rating of US cotton was 39 per cent as of September 15, 2024, slightly down from 40 per cent the previous week but significantly higher than 29 per cent during the same period last year.

The USDA also noted that the US cotton harvest rate was 10 per cent, up from 8 per cent the previous week, 9 per cent during the same period last year, and above the five-year average of 8 per cent.

Furthermore, the USDA reported that boll setting in US cotton reached 54 per cent, up from 45 per cent the previous week, 52 per cent last year, and higher than the five-year average of 50 per cent.

Traders are closely monitoring the possibility of interest rate cuts by the Federal Reserve, which has kept rates at a four-and-a-half-year high. Any major developments from the Fed meeting could provide momentum for prices.

Currently, ICE cotton for December 2024 is trading at 71.85 cents per pound, down 0.31 cents. Cash cotton was traded at 66.55 cents (down 1.59 cents), the October contract at 70.81 cents (down 0.94 cents), the March 2025 contract at 73.33 cents per pound (down 0.36 cents), the May 2025 contract at 74.41 cents (down 0.34 cents), and the July 2025 contract at 75.03 cents (down 0.30 cents). A few contracts remained unchanged from the last closing, with no trading activity noted today.

Fibre2Fashion News Desk (KUL)