ICE cotton recovers on weaker dollar, rising crude oil prices

Yesterday, the ICE cotton March 2025 contract settled at 67.77 cents per pound (0.453 kg), up by 0.27 cents. However, the contract remained near contract-low territory, with its fifth-lowest close recorded at 67.77 cents. The March contract had recorded 67.01 cents last Friday.

The US dollar index fell by 0.1 per cent yesterday, making cotton purchases more affordable for international buyers, which supported sentiments in the cotton trade. Crude oil prices surged as US inventories experienced a sharp drop. New US sanctions on Russia may disrupt supply in the global market, further driving up crude oil prices.

The volume traded on January 15 was 36,796 contracts, while 43,011 contracts were cleared on January 14. ICE data as of January 14 revealed a sharp drop in deliverable No. 2 cotton futures contract inventory to 218 bales, compared to 20,113 bales on the previous trading day, signalling tighter supplies.

CBOT corn and soybean futures showed strength, driven by forecasts of rain in Argentina, with soybeans trading near multi-month highs.

Anhlighalysts higted that while cotton prices recorded small gains, the market remains fragile. Traders are awaiting Friday’s USDA Supply and Demand Report, which is expected to provide detailed insights into the cotton supply and demand outlook. This report could confirm bearish trends or provide a potential catalyst for market recovery.

Presently, ICE cotton for March 2025 was traded at 67.58 cents per pound (down 0.19 cent). Cash cotton was traded at 65.27 cents (up 0.27 cent), the May 2024 contract at 68.81 cents per pound (down 0.11 cent), the July 2025 contract at 69.70 cents (down 0.22 cent), the October 2025 contract at 69.00 cents (up 0.09 cent), and the December 2025 contract at 69.30 cents (down 0.14 cent). A few contracts remained at the level of the last closing, with no trading noted today.

ALCHEMPro News Desk (KUL)