ICE cotton slips on weak exports, but lower acreage offers support

Yesterday, the ICE cotton May 2025 contract settled at 66.60 cents per pound (0.453 kg), down by 0.27 cents. Most cotton contracts settled lower, declining between 9 and 19 points. The March, May, and July contracts hit new contract lows, reflecting sustained downward pressure on prices. This marked the sixth decline in the last seven sessions for most contracts.

Crude oil prices rose by more than 2 per cent after the US revoked Chevron’s licence to operate in Venezuela, reigniting concerns about global crude supply. Higher crude oil prices pushed up polyester fibre prices.

Trading volume remained steady, with 34,334 contracts traded, nearly matching the previous day’s volume of 34,018 contracts. ICE data showed a significant increase in deliverable cotton inventory, with the No. 2 cotton futures contract inventory rising to 12,653 bales as of February 26, up sharply from 1,732 bales on the previous trading day. This increase in inventory added to the bearish sentiment in the market.

The US Department of Agriculture (USDA) released export sales data showing that US cotton export sales for the current marketing year totalled 166,900 bales in the week ending February 20. This represented a 47 per cent decline from the previous week and a 35 per cent drop compared to the four-week average.

A preliminary USDA report had projected an 11 per cent year-on-year decline in the US cotton planting area for the 2025-26 season, with expected plantings falling to 10 million acres. This reduction was attributed to low cotton prices, which discouraged farmers from planting cotton.

Analysts have noted that the expected reduction in planting area could provide support for old-crop cotton prices, as a smaller crop in the upcoming season would reduce supply pressures.

Currently, ICE cotton for May 2025 is trading at 65.94 cents per pound (down 0.66 cents), cash cotton at 64.60 cents (down 0.27 cents), the March 2024 contract at 65.20 cents per pound (down 0.17 cents), the July 2025 contract at 67.07 cents (down 0.61 cents), the October 2025 contract at 68.94 cents (down 0.16 cents), and the December 2025 contract at 68.38 cents (down 0.29 cents). A few contracts remained unchanged from the previous closing, with no trading recorded today.

ALCHEMPro News Desk (KUL)