ICE cotton bearish, prices fall amid stronger dollar & weak oil prices

Yesterday, the ICE cotton May 2025 contract settled at 66.87 cents per pound (0.453 kg), down by 0.50 cents. It has lost a total of 195 points in the last six sessions. Other contracts have declined between 10 and 59 points, indicating broad-based selling pressure across the market.

The US dollar strengthened, rebounding from an 11-week low, making cotton purchases more expensive for overseas buyers. Oil prices slipped due to an unexpected rise in US refined product inventories, which indicated weak demand. Geopolitical concerns also weakened sentiment in the crude oil market. Lower crude oil prices reduced the cost of producing polyester fibre, a man-made alternative to cotton.

The trading volume was 34,018 contracts, including 5,350 EFS trades and 98 EFP trades, while cleared contracts totalled 31,058, with 5,150 EFS trades included. ICE No. 2 cotton stocks remained stable at 1,732 bales as of February 25, indicating no significant changes in supply levels.

The USDA Agricultural Outlook Forum is ongoing, with the 2025 Outlook Reports set for release on Thursday, which could significantly influence market sentiment.

Traders are awaiting the USDA Export Sales Report, due on Thursday, which has shown strong export numbers in recent weeks and could potentially provide a catalyst for price movement.

Market analysts noted that March contract activity has slowed, reducing market volatility as traders shift focus to later months.

Currently, ICE cotton for May 2025 is trading at 66.90 cents per pound (up 0.03 cents). Cash cotton is trading at 64.87 cents (down 0.50 cents), the March 2024 contract at 65.37 cents per pound (down 0.59 cents), the July 2025 contract at 67.90 cents (up 0.03 cents), the October 2025 contract at 69.10 cents (down 0.21 cents), and the December 2025 contract at 68.78 cents (up 0.03 cents). A few contracts remain at the same level as the last closing, with no trading recorded today.

ALCHEMPro News Desk (KUL)