ICE cotton recovers on weaker dollar, but crude oil prices cap gains

Yesterday, the ICE cotton May 2025 contract settled at 63.67 cents per pound (0.453 kg), up by 0.43 cents. Cotton traded lower in early trading on Wednesday but gained later in the session. May and other contracts managed to settle in the green zone after initially trending downward. Other contracts settled between 3 points lower and 39 points higher.

Investors were concerned about the impact of trade tensions, which contributed to the decline of the US dollar against most currencies. There was also a possibility of US economic contraction. However, US stocks closed higher yesterday in choppy trading, supported by better-than-expected services sector data and optimism over easing trade tensions between the US and other major trading partners.

Crude oil prices slipped for the third consecutive day, making polyester, a cotton substitute, cheaper.

The trading volume was 52,648 contracts, with 122,603 contracts cleared the previous day. ICE data showed that the deliverable No. 2 cotton futures contract inventory increased to 13,771 bales as of March 4, up from 12,653 bales the previous day.

Cotton prices remained near a four-year low due to demand concerns and fears that US tariffs could disrupt agricultural exports. Cotton prices had plunged over 3 per cent on March 4, hitting their lowest level since August 2020, driven by tariff-related concerns.

Traders await the USDA’s weekly export sales report on March 6 for clarity on demand.

In other markets, Chicago Board of Trade (CBOT) soybean, corn, and wheat futures prices rose, rebounding from multi-week lows as trade tensions eased.

Currently, ICE cotton for May 2025 is trading at 64.47 cents per pound (up 0.80 cent). Cash cotton is trading at 61.67 cents (up 0.43 cent), the March 2024 contract at 62.36 cents per pound (up 0.32 cent), the July 2025 contract at 65.65 cents (up 0.78 cent), the October 2025 contract at 67.01 cents (up 0.39 cent), and the December 2025 contract at 67.44 cents (up 0.60 cent). A few contracts remained at the level of the last closing, with no trading noted today.

ALCHEMPro News Desk (KUL)