ICE cotton down on weak USDA projections, weaker dollar limits losses

The ICE cotton July 2025 contract settled at 66.28 cents per pound (0.453 kg), down 0.35 cent from the previous day. The contract recorded a net six-day loss of 214 points. The December contract settled at 68.77 cents, also down 0.08 cent on the day, with a total loss of 121 points over the last six sessions. Other contracts ranged from 6 points lower to 27 points higher.

The US dollar index declined by 0.4 per cent, helping limit further downside by making US cotton cheaper for foreign buyers.

Daily trading volume stood at 41,465 contracts, compared to 63,602 contracts cleared the previous day. Certified stock levels rose by 4,971 bales to reach 27,240 bales, reflecting an increase in deliverable supply. Since May 1, ICE has seen 13,994 new bale certifications and 1,232 decertifications, indicating a net stock build-up.

Analysts noted that if July continues to weaken against December, delivery incentives may decline, potentially affecting market flow.

The USDA WASDE May report projected the 2025–26 planted area at 8.37 million acres, up from 7.81 million acres in 2024–25. US cotton production for the current year is forecast at 14.5 million bales, slightly higher than last season’s 14.41 million bales.

Analysts described this as "the most bearish US production number of the year" due to burdensome supply expectations.

On the trade front, the US and China agreed to a 90-day reduction in tariffs, temporarily easing trade war concerns. However, cotton markets were disappointed as no concrete trade deal was reached—only a temporary understanding—leading to continued price volatility.

At present, ICE cotton for July 2025 is trading at 66.39 cents per pound (up 0.11 cent), cash cotton at 64.53 cents (down 0.35 cent), the October 2025 contract at 68.83 cents (down 0.06 cent), the December 2025 contract at 68.95 cents (up 0.18 cent), the March 2026 contract at 70.26 cents per pound (up 0.18 cent), and the May 2026 contract at 71.27 cents (up 0.28 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

ALCHEMPro News Desk (KUL)