ICE cotton gains for second day amid volatile market trends

22 May '24

2 min read

ICE cotton gains for second day amid volatile market trends

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Insights

ICE cotton contracts secured gains for the second consecutive day on Tuesday, settling at 76.38 cents per pound for the July contract, up 35 points.
Despite recent volatility, traders are optimistic due to potential support from excessive moisture in US cotton belts.
A stronger dollar made cotton purchases more expensive for foreign buyers.

ICE cotton has noticed gains on Tuesday, second day in a row. ICE cotton contracts succeeded to secure gains after volatile trend in the previous session. However, it will be early to predict any significant change in the dynamics. Traders expected better buying on lower prices. Excessive moisture in few cotton belts of the US may provide some support. But the market was waiting to see export sales data due on Thursday.

According to trade analysts, US cotton July contract settled 35 points higher at 76.38 cents per pound (0.453 kg). The contract has gained 175 points in the last two days. It had touched low level in the last week. December contract settled at 75.28 cents, up 27 points on Tuesday.

Yesterday, dollar index was slightly up, settled at 104.5. It made cotton purchase expensive for foreign buyers. Stronger dollar was limiting gains in cotton futures.

ICE cotton improved slightly, and it reached 32,171 contracts on Tuesday, with 25,555 contracts cleared the previous day. The trading volume was very slow in the past few sessions as no major fundamental or technical trigger was available. Open interest started at 225,322, up by 1,270 contracts from the previous day. Yesterday, Certified stocks began the day at 190,653 bales. It includes 1,649 new certs and 3,344 decerts, with 202 bales awaiting review.

Key reason for gains in ICE cotton were concerns about wet weather affecting crop planting progress in many pockets. Prices are expected to remain stable unless there is a significant rally above 77 cents.

On Tuesday, ICE cotton July 2024 was traded 0.88 cent higher at 76.26 cent per pound. While, Cash cotton was traded at 72.13 cent (up 0.35 cent), October (new crop) contract 77.38 cents (up 1.30 cent), December 2024 contract 75.29 cents (up 0.57 cent), March 2025 77.54 cents per pound (up 0.65 cent) and May 2025 78.79 cents (up 0.61 cent).

Fibre2Fashion News Desk (KUL)

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