ICE cotton slips after two-week high on stronger dollar

The ICE cotton July 2025 contract settled at 67.38 cents per pound (0.453 kg), down 0.45 cent from the previous day. The contract had earlier reached its highest level since April 25. The December contract settled at 69.25 cents, also down 0.27 cent on the day. Other contracts ranged from 22 to 32 points lower. Despite the decline, May’s strong settlement has offered July futures a reasonable upside target.

Trading volume on May 7 was 48,643 contracts, higher than the 34,224 contracts cleared the previous day. ICE reported that as of May 6, 2025, deliverable No. 2 cotton stocks remained unchanged at 14,049 bales.

Market analysts said cotton prices initially rose on hopes of an improved trade outlook but later came under pressure. They expect improvement later this year, driven by reduced plantings, a 10 per cent depreciation in the dollar, and increased export activity.

US stock markets closed higher, with semiconductor stocks rising sharply, supported by news that AI chip regulations could be eased. In the agricultural sector, Chicago Board of Trade (CBOT) soybean futures declined for the third consecutive day amid concerns over global demand and competition.

Export data from Brazil’s Secex reported cotton exports of 239,145.21 tons in April 2025, averaging 11,957.26 tons per day—9 per cent higher than April 2024’s daily average of 10,973.14 tons. However, Brazil’s total cotton exports for the month were slightly lower than the 241,409.03 tons recorded in April 2024.

Overall, while short-term pressure persists, the longer-term outlook for cotton remains moderately positive due to supportive fundamental factors.

At present, ICE cotton for July 2025 is trading at 67.51 cents per pound (up 0.13 cent), cash cotton at 65.63 cents (down 0.45 cent), the October 2025 contract at 69.40 cents (down 0.26 cent), the December 2025 contract at 69.28 cents (up 0.03 cent), the March 2026 contract at 70.48 cents per pound (up 0.03 cent), and the May 2026 contract at 71.49 cents (up 0.13 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

ALCHEMPro News Desk (KUL)