ICE cotton continues to face pressure, market pares previous gains

25 Apr '24

2 min read

ICE cotton continues to face pressure, market pares previous gains

Pic: Adobe Stock

Insights

ICE cotton prices continued to slide, as a stronger dollar and weak crude oil prices remain unfavourable for the commodity.
In the latest session, cotton settled significantly lower, with the July contract at 81.01 cents per pound, down 71 points.
Trading volume was the lightest since December 26, 2023, indicating reduced market activity.

ICE cotton did not find relief from its losses, lacking a clear trigger to reverse the trend. Cotton prices continued to endure selling pressure. Factors such as a stronger dollar index and weak crude oil prices remained unfavourable for the commodity. Additionally, improved weather conditions and favourable crop prospects in the US cotton regions were also unsupportive for the trade.

ICE cotton for July settled at 81.01 cents per pound (0.453 kg), down 71 points, losing most of its weekly gains. December settled at 77.69 cents, down 39 points. There was little trade in the last session.

According to trade sources, trading volume was declining. On Wednesday, the volume was 20,645 contracts, the lightest volume since December 26, 2023. Certified stocks began today at 176,977 bales, up 192 bales. There were 12,010 bales awaiting review, which was surprising since certified stocks are already greater than the May open interest.

The dollar index was up yesterday, settling with mild gains of 0.2 per cent, making cotton more expensive for buyers. Crude oil also showed weakness, which dragged cotton markets to lower levels.

Recent developments in the US cotton market have led to increased pressure at the macro level. Favourable weather conditions have increased expectations for higher production in the US.

In Thursday’s session, ICE cotton for July 2024 traded 0.24 cent lower at 80.77 cents per pound. Meanwhile, Cash cotton was traded at 76.76 cents (down 0.71 cent), May 2024 at 79.51 cents (down 0.71 cent), the October (new crop) contract at 78.47 cents (down 0.57 cent), the December 2024 contract at 77.55 cents (down 0.14 cent), and March 2025 at 79.18 cents per pound (down 0.13 cent).

Fibre2Fashion News Desk (KUL)

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