ICE cotton rises, gains momentum from strong demand at lower prices

According to market data, the ICE cotton July contract settled at 82.42 cents per pound of 0.453 kg, with gains of 140 points. The contract saw a further increase in today’s session.

In the last session, the dollar index was also slightly weak, which helped cotton maintain its gains. However, crude oil prices were slightly down yesterday, which limited cotton's gains. Cheaper crude oil makes the polyester value chain cheaper, which is a negative factor for cotton.

Trade volume was low in last night's session, with a volume of just 40,454 contracts, slightly lower than Friday's 41,754 contracts. Open interest increased for the second consecutive day, with a 2-day recovery of 2,333 contracts after 11 sessions of liquidation. Open interest started at 203,754 contracts, up by 865 contracts from Friday. Certified cotton stocks began at 176,610 bales, with 791 bales added and 264 bales decertified, while 6,083 bales awaited review.

According to the USDA’s US crop sowing report, around 11 per cent of the cotton crop sowing has been completed in the US, which is consistent with the five-year average and equal to last year’s figure. Although, a few areas report drought conditions. Traders are now focusing on any impact on the cotton sowing area.

In today’s session, ICE cotton July 2024 was traded 0.22 cent higher at 82.64 cents per pound. Meanwhile, cash cotton was traded at 78.17 cents (up 1.40 cents), May 2024 at 80.51 cents (up 0.47 cent), October (new crop) contract at 79.22 cents (up 0.65 cent), December 2024 contract at 78.60 cents (up 0.11 cent), and March 2025 at 80.18 cents per pound (up 0.13 cent).

ALCHEMPro News Desk (KUL)