ICE cotton opens with short covering gains, mixed trend in contracts

In the US session, the ICE cotton cash price gained 0.40 cent, reaching 82.15 cents. The July 2024 contract had a mild gain of 0.04 cent, reaching 88.43 cents, while the October 2024 (new crop) contract dipped by 0.10 cent to 83.49 cents per pound. The December 2024 contract also faced negative sentiment and eased by 0.19 cent to 82.35 cents. The March 2025 contract was noted with a loss of 0.18 cent, reaching 83.36 cents per pound.

According to a market analyst, the weak dollar index benefitted ICE cotton as it reduced the buying cost for investors. However, a decline in crude oil prices was a negative factor for the natural fibre. Higher sales from farmers could not sustain cotton prices at a higher level.

The USDA's second progress report for the 2024-25 crop showed that only 5 per cent of the US cotton crop had been planted, compared to the 5-year average of 6 per cent. The market braced for adverse weather, which might affect new cotton prices, as some areas started developing drought patches. The market is awaiting the upcoming WASDE report from the USDA on April 11. Traders expect a further decline in cotton stock in the US and a tight supply.

According to ICE data, certificated stocks saw another increase, starting at 112,054 bales, with additions in various locations including Memphis, Dallas, Houston, and Galveston. Warehouses owned by Olam saw the largest increase in certificated stocks, adding 34,128 bales. Open interest in cotton futures experienced a significant decline, starting at 268,324 contracts, down 6,550 contracts from Friday.

Fibre2Fashion News Desk (KUL)