ICE cotton contracts hit multi-month lows amid market turbulence

According to trade analysts, the US cotton July contract dropped 309 points to 78.43 cents per pound (0.453 kg). The contract touched a new low of 78.03 cents during the previous session. The December contract settled at 76.83 cents per pound with a loss of 142 points on Tuesday. It lost 716 points in April 2024.

The dollar index crossed 106 levels and settled above this, making cotton expensive and unattractive for foreign buyers. Meanwhile, crude oil settled lower after a calm in the Middle East, which hurt cotton sentiments. The Federal Open Market Committee’s decision on interest rates are . Analysts are not expecting any interest rate cut due to inflation concerns.

ICE cotton noticed gains in trading volume after previous declines. A total of 59,615 contracts were traded on Tuesday. Certified cotton stocks began to decline, starting today at 182,659 bales, with a net reduction for the first time since March.

Currently, US cotton belts are experiencing favourable weather, which is supportive of a big crop ahead. This was also another reason for the major tsunami in the market. During March 2024, ICE May lost 8.19 cents, and ICE July lost 5.80 cents. The ICE cotton July contract lost 13.54 cents in April 2024.

In Wednesday's session, the ICE cotton July 2024 was traded 0.39 cent lower at 78.04 cents per pound. Meanwhile, cash cotton was traded at 74.18 cents (down 3.09 cents), May 2024 at 78.04 cents (down 2.10 cents), the October (new crop) contract at 77.26 cents (down 1.79 cents), the December 2024 contract at 76.60 cents (down 0.23 cent), and March 2025 at 78.28 cents per pound (down 0.21 cent).

Fibre2Fashion News Desk (KUL)