ICE cotton further weakens on stronger dollar, sluggish demand

Yesterday, the ICE cotton March 2025 contract settled at 68.23 cents per pound (0.453 kg), down by 0.28 cents. The contract has shed 57 points in the last two sessions after gaining 102 points on Monday. Other contracts declined by 17 to 35 points during the last session.

The US dollar index rose for the second consecutive session due to rising Treasury yields, making cotton purchases more expensive for overseas buyers. Crude oil prices eased by more than 1 per cent on Wednesday due to a stronger dollar and a sharp rise in US fuel inventories. Cheaper crude oil reduced the cost of the polyester value chain, a man-made alternative fibre to cotton.

The trading volume was reported at 35,598 contracts, the highest in the first five sessions of 2025. The lowest volume recorded was 32,478 contracts on Friday. Data from the Intercontinental Exchange (ICE) as of January 7 showed that deliverable stocks of No. 2 cotton futures contracts remained unchanged at 20,113 packages.

Market analysts noted that the market fell early in the session before stabilising, reflecting anticipation of the USDA report. Cotton demand remained sluggish, with prices projected to range between 65 and 72 cents per pound in the near term.

In related markets, CBOT (Chicago Board of Trade) corn and wheat futures declined slightly, while soybean futures gained on hopes for rain in Argentina's dry crop areas.

Currently, ICE cotton for March 2025 is trading at 68.16 cents per pound (down 0.07 cent). Cash cotton is trading at 65.73 cents (down 0.28 cent), the May 2024 contract at 69.35 cents per pound (down 0.02 cent), the July 2025 contract at 70.40 cents (unchanged), the October 2025 contract at 69.30 cents (down 0.18 cent), and the December 2025 contract at 69.44 cents (down 0.13 cent). A few contracts remain at the level of the last closing, with no trading noted today.

ALCHEMPro News Desk (KUL)