ICE cotton slips despite rise in crude oil, rain forecast eases worry

Yesterday, the ICE cotton March 2025 contract settled at 68.51 cents per pound (0.453 kg), down by 0.17 cents. The contract had gained 102 points on Monday. Other contracts recorded changes ranging from 14 points lower to 8 points higher.

Oil prices rose due to supply constraints from Russia and Iran amid Western sanctions and expectations of rising demand from China. Higher crude oil prices increased the cost of production in the polyester value chain, a man-made alternative to cotton, thereby increasing the appeal of cotton futures.

The trading volume was 34,165 contracts, slightly higher than the previous day's cleared volume of 33,661 contracts. ICE deliverable No. 2 cotton futures contract stocks remained unchanged at 20,113 bales as of January 6.

Market analysts stated that the market is unlikely to move up quickly but will rise slowly due to improving demand. The market movement was influenced by speculative traders buying back short futures.

In other markets, soybean futures fell as traders locked in profits following expectations that drought-stricken crops in Argentina will be relieved by rain in the coming weeks. Corn futures rose slightly as traders adjusted positions ahead of the USDA supply and demand report.

Currently, ICE cotton for March 2025 is trading at 68.39 cents per pound (down 0.12 cents). Cash cotton is trading at 66.01 cents (down 0.17 cents), the May 2024 contract at 69.54 cents per pound (down 0.14 cents), the July 2025 contract at 70.63 cents (down 0.12 cents), the October 2025 contract at 69.48 cents (up 0.08 cents), and the December 2025 contract at 69.69 cents (down 0.19 cents). A few contracts remain at the level of the last closing, with no trading noted today.

ALCHEMPro News Desk (KUL)