ICE cotton drops on US rains, early Indian monsoon

The ICE cotton July 2025 contract settled at 64.99 cents per pound (0.453 kg), down 1.06 cents, or 1.6 per cent, from the previous day. The decline reflected a bearish tone driven by improved planting conditions. The December 2025 contract settled at 67.77 cents, down 76 points, although it recorded a weekly net gain of 2 points, suggesting moderate long-term support. The July contract registered a weekly decline of 7 points.

Cotton prices have remained trapped in a tight 15-session range, highlighting market indecisiveness and the absence of fresh bullish drivers.

Trading volume on June 4 was 45,927 contracts, significantly lower than the previous day's cleared volume of 59,818 contracts, indicating reduced speculative activity. As of June 3, ICE-certified deliverable cotton stocks for the No. 2 contract remained unchanged at 53,700 bales, reflecting stable warehouse conditions.

According to market analysts, West Texas is expected to receive highly favourable rainfall over the next week—sufficient to benefit planting and increase the sown area. Texas farmers are forecast to experience the most favourable rainfall in several years, a development typically associated with improved crop prospects and, consequently, downward pressure on prices.

The short-term weather outlook in the US remains bearish for the market, as it supports better crop establishment and reduces weather-related risk premiums.

In India, Monsoon rains have begun early and are performing well, raising expectations for a strong 2025 cotton crop. As one of the world’s largest producers and consumers of cotton, India’s improved crop outlook could reduce its import dependency, thereby hurting demand for US exports and weighing on the global price competitiveness of American cotton.

Market participants are now awaiting the USDA Weekly Export Sales Report, due on Thursday, to assess demand strength—particularly from key buyers such as Vietnam, China, and Bangladesh.

Presently, ICE cotton for July 2025 is being traded at 64.73 cents per pound (down 0.26 cent), cash cotton at 63.24 cents (down 1.14 cent), the October 2025 contract at 67.41 cents (down 0.70 cent), the December 2025 contract at 67.58 cents (down 0.19 cent), the March 2026 contract at 69.07 cents per pound (down 0.17 cent), and the May 2026 contract at 70.12 cents (down 0.15 cent). A few contracts remained unchanged, with no trading recorded today.

ALCHEMPro News Desk (KUL)