ICE cotton slips as crude oil falls, market eyes USDA data

The most active ICE December 2025 contract settled at 66.84 cents per pound (0.453 kg), down 0.27 cent. The contract had earlier hit a one-week high after dropping to 66.34 cents on Friday, its lowest level since June 23. Cotton futures traded sideways, with prices ending 19 to 27 points lower, except for October, which rose 11 points to 65.70 cents.

Crude oil prices declined, raising uncertainty over whether the United States will impose new sanctions on Russia. Lower oil prices make polyester—a substitute for cotton—cheaper.

Trading volume totalled 28,139 contracts, including 4,200 contracts executed via EFS. The inventory of ICE’s deliverable No. 2 cotton futures contract stood at 21,617 bales as of August 5, unchanged from the previous day.

Cotton has been less influenced by other markets, unlike corn and wheat, which have hit new contract lows. In contrast, US equities have recovered from recent losses.

The US has imposed 50 per cent tariffs on certain Brazilian goods, effective August 6, 2025, affecting approximately 35 per cent of Brazil’s exports to the US.

Market analysts noted that lower spot prices and spreads are providing buying opportunities, with fund managers covering short positions at the recent low of 66 cents, offering support. Some buying also stemmed from market fundamentals, while a weaker dollar encouraged additional purchases.

Traders are now preparing for the US Department of Agriculture’s (USDA) weekly export sales report on Thursday, followed by the closely watched Monthly Supply and Demand Estimates (WASDE) next week.

Overall risk appetite improved, with US stock futures climbing as investors bet on a potential Federal Reserve interest rate cut later this year and digested a new round of corporate earnings.

In grains, Chicago wheat futures hovered above a five-year low, while corn futures remained near contract lows amid a global supply glut. Soybean prices closed lower.

Brazil’s cotton prices declined due to increased supply and falling international prices. Brazilian cotton continues to undercut US offers by at least 4 cents, contributing to weak demand. Ongoing tariff turmoil has also impacted the market.

Export data from Brazil’s Secretariat of Foreign Trade (Secex) showed that Brazil exported 127,049.29 tons of cotton in July, with an average daily export volume of 5,523.88 tons—a 24 per cent decrease from the average daily export of 7,270.13 tons in July of the previous year.

As of now, ICE cotton for December 2025 is trading at 66.95 cents per pound (up 0.11 cent), cash cotton at 63.31 cents (up 0.11 cent), the October 2025 contract at 65.70 cents (up 0.11 cent), the March 2026 contract at 68.29 cents (up 0.10 cent), the May 2026 contract at 69.40 cents (up 0.08 cent), and the July 2026 contract at 70.21 cents (up 0.05 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

ALCHEMPro News Desk (KUL)