ICE cotton slips again amid weak factors; speculators reduce positions

According to trade analysts, the US cotton July contract shed 18 points to 80.90 cents per pound (0.453 kg), while the December contract settled at 77.31 cents per pound with a loss of 33 points on Friday. Yesterday, the dollar index was stronger, settling with 0.4 per cent gains, which pulled cotton down amid a narrow range.

ICE Cotton volume was noted at 22,709 contracts, making it the second lowest volume of 2024, indicating a significant decrease in trading activity. Lower volume persisted over the last three sessions, with 28,224 contracts traded on Thursday and 20,645 contracts on Wednesday, marking the lowest volumes of the year for each respective day.

Trade sources said that speculators have been reducing their net long positions over the past seven weeks, with their current position amounting to approximately one-tenth of the net long positions seven weeks ago. This shows a shift in sentiment among market participants. Concurrently, traders were gradually reducing their net short positions, indicating a cautious approach at lower levels.

Open interest started today at 202,039 contracts, showing a decrease of 575 contracts compared to the previous day. This brings open interest close to the recent low of 201,421 contracts recorded on April 17, indicating a decline in the number of outstanding contracts. Certified stocks began today at 181,430 bales, showing an increase of 3,263 bales in new certifications. Additionally, there were 10,174 bales awaiting review. Higher stocks in the certified exchange were putting pressure on speculators.

ICE cotton July 2024 was settled 0.18 cent lower at 80.90 cents per pound. Meanwhile, cash cotton was traded at 76.65 cents (down 0.18 cent), May 2024 at 79.40 cents (down 0.18 cent), the October (new crop) contract at 78.31 cents (down 0.24 cent), the December 2024 contract at 77.31 cents (down 0.33 cent), and March 2025 at 80.90 cents per pound (down 0.18 cent).

Fibre2Fashion News Desk (KUL)