ICE cotton rebounds after heavy losses, short covering dominates

Yesterday, the ICE cotton July 2025 contract settled at 66.12 cents per pound (0.453 kg), up 0.77 cent (1.2 per cent) from the previous session. The December 2025 contract rose 0.66 cent to settle at 67.60 cents. Other contracts posted gains between 65 and 99 points. The July contract had touched an intraday low of 66.18 cents—the lowest since April 9.

The US dollar rebounded modestly against the euro and yen after falling more than 3 per cent last week. The continued weakness in the dollar has supported cotton exports by making US cotton more affordable for foreign buyers.

Total trading volume during the session was 54,105 contracts, lower than Monday’s volume of 68,068 contracts.

The price increase was mainly driven by short covering following the previous session’s sharp drop. Analysts noted that the five-day low triggered covering by short sellers. Despite Tuesday’s gains, the market has not yet fully recovered Monday’s losses.

Overall, it was a quiet session for most markets, which made cotton’s resilience stand out. Market participants are now focused on the US Department of Agriculture’s weekly export sales report due Thursday, which will offer clearer insights into international demand during last week’s volatility.

Analysts expect a potential dip in export demand in the upcoming report, though they believe the impact may be temporary. Meanwhile, US stock markets closed slightly lower amid ongoing tariff-related uncertainty and weakness in consumer and healthcare sectors, despite some support from strong bank earnings.

Currently, ICE cotton for May 2025 is trading at 64.68 cents per pound (down 0.40 cent), cash cotton at 62.83 cents (up 0.99 cent), the July 2025 contract at 65.81 cents (down 0.31 cent), the October 2025 contract at 68.00 cents (up 0.74 cent), the December 2025 contract at 67.23 cents (down 0.37 cents) and the March 2026 contract at 68.40 cents per pound (down 0.34 cent). Some contracts remained unchanged from the last closing, with no trades recorded today.

ALCHEMPro News Desk (KUL)