ICE cotton recovers but hits one-week low as weak demand persists

ICE’s most active December 2025 contract settled at 68.25 cents per pound (0.453 kg), up 0.15 cent. However, the contract touched an intraday low of 67.28 cents—the lowest level since July 14. Other nearby contracts ended the session 5 to 18 points higher, while long-term contracts settled with losses of up to 90 points, suggesting bearish long-term sentiment.

Crude oil prices fell for the third consecutive session on Tuesday due to fading hopes of a trade deal between the US and Europe, fuelling concerns of a broader economic slowdown. Declining oil prices reduced the production cost of polyester fibre—a cotton substitute—further pressuring natural fibre demand.

Daily trading volume on July 22 stood at 25,100 contracts, marking the fourth-lowest volume in 2025 so far. Notably, 7 of the 10 lowest trading volumes recorded in 2025 have occurred in July, highlighting a broader seasonal or sentiment-driven slowdown. The previous day’s cleared volume was 31,928 contracts, indicating a sharp drop in trading activity. According to ICE data as of July 21, the deliverable No.?2 cotton contract inventory remained unchanged at 22,337 bales, indicating stable warehouse stocks.

According to the USDA’s July 21 report, 57 per cent of the US cotton crop was rated in good to excellent condition—up from 54 per cent last week and 53 per cent during the same period last year. The improvement in crop conditions has added to bearish sentiment as traders anticipate higher yield potential.

Chicago Board of Trade (CBOT) corn and soybean futures also extended losses due to forecasts of crop-friendly rains in the US grain belt, exerting indirect downward pressure on cotton.

Market participants are closely monitoring trade negotiations, with an August 1 deadline looming. Failure to strike a deal may result in steep US tariffs on goods from trading partners.

Currently, ICE cotton for December 2025 is trading at 68.51 cents per pound (up 0.26 cent); cash cotton at 65.34 cents (up 0.05 cent); the October 2025 contract at 66.59 cents (up 0.05 cent); the March 2026 contract at 69.79 cents (up 0.18 cent); the May 2026 contract at 70.90 cents (up 0.23 cent); and the July 2026 contract at 71.65 cents (up 0.21 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

ALCHEMPro News Desk (KUL)