ICE cotton rises sharply on lower year-end US stock, production cut

13 Aug '25

2 min read

ICE cotton rises sharply on lower year-end US stock, production cut

Pic: Adobestock

Insights

ICE cotton futures surged after the USDA projected lower 2025–26 US production and year-end stocks, with the December 2025 contract hitting its highest since July 24.
A weaker US dollar boosted overseas buying.
Trading volume more than doubled, reaching a two-month high.
The USDA cut production to 13.21 million bales and stocks to 3.6 million bales, both below market expectations.

ICE cotton futures surged after the USDA projected lower US year-end stocks and production. The WASDE report cut year-end stocks below the market average, prompting overseas buyers to pursue new deals amid a weaker US dollar, which made US cotton purchases more affordable internationally.

ICE’s most active December 2025 contract settled at 68.39 cents per pound (0.453 kg), up 1.63 cents (2.44 per cent), marking the largest single-day gain since May 2, 2025, and the highest close since July 24. Other contracts rose between 82 and 178 points.

The US dollar weakened after modest CPI growth, further boosting US cotton’s competitiveness abroad.

Trading volume reached 74,011 contracts—more than double the previous day’s 35,550 and the highest in two months. As of August 11, ICE deliverable No. 2 cotton stocks stood at 18,242 bales, unchanged from the prior day.

The USDA projected 2025–26 US cotton production at 13.21 million bales, down nearly 1.4 million bales from July’s 14.6 million and 1.2 million bales below the 2024–25 season. Ending stocks were estimated at 3.6 million bales, down 1 million from July’s 4.6 million.

Market analysts noted that production was below average estimates. Prices had not risen earlier in the week as traders had already anticipated bullish data due to rising crude oil futures.

On August 12, China and the US agreed to suspend 24 per cent reciprocal tariffs for 90 days, starting the same day. China will also suspend related non-tariff countermeasures against the US and Canada for 90 days.

For the week ending August 5, speculators increased net short positions in ICE cotton futures/options by 7,782 lots to 60,754 lots, according to CFTC data.

CBOT soybean futures rose for a second session after the USDA reduced planted acreage estimates, lowering harvest forecasts.

Currently, ICE cotton for December 2025 is trading at 68.24 cents per pound (down 0.15 cent), cash cotton at 65.82 cents (up 1.78 cent), the October 2025 contract at 67.07 cents (up 1.78 cent), the March 2026 contract at 69.74 cents (down 0.10 cent), the May 2026 contract at 70.96 cents (down 0.06 cent) and the July 2026 contract at 71.76 cents (unchanged). A few contracts remained at previous closing levels, with no trading recorded today.

Fibre2Fashion News Desk (KUL)

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