ICE cotton dipped again yesterday due to bearish factors. Lower exports of US cotton and weaker crude oil prices dragged down ICE cotton to a 17-month low. The declining trend in the US dollar failed to provide any support for ICE cotton. July and December 2024 contracts settled further lower. Notably, there has been a decline in 18 out of the last 23 trading sessions.

The US cotton July contract settled 89 points lower at 75.62 cents per pound (0.453 kg). The December contract settled at 74.18 cents, down 99 points. Earlier in the last session, prices showed a positive trend but lost momentum after a weaker sales report. Technical analysis of July and December cotton futures reveals a bearish trend as prices consistently trade below their short- and long-term moving averages, as per trade analysts.

Yesterday, the dollar index remained weak, which limited the decline of cotton prices; which would have otherwise been under more pressure.

Crude oil prices also eased on Thursday, thus pressuring cotton demand. Lower crude oil prices made the polyester value chain cheaper. Trading volume was slightly down yesterday, at around 43,108 contracts, compared to 56,592 contracts cleared the previous day. Certified stocks increased further to 186,121 bales, with none awaiting review.

Lower sales figures than expected contributed to the bearish sentiment. Weekly shipments amounted to 186,400 bales, comprising both Upland and Pima varieties.

Weather conditions remain supportive for cotton in the US, with only 8 per cent of the cotton area under drought stress. Any adverse weather developments in the US cotton area needs to be closely monitored.

During Friday's session, ICE cotton July 2024 was traded 0.07 cent higher at 75.69 cents per pound. Cash cotton was traded at 71.37 cents (down 0.89 cents), May 2024 at 75.69 cents (down 0.89 cents), October (new crop) contract at 75.03 cents (down 0.97 cents), December 2024 contract at 74.36 cents (up 0.18 cents), and March 2025 at 75.68 cents per pound (up 0.06 cents).

Fibre2Fashion News Desk (KUL)

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