Yesterday, the ICE cotton December contract settled at 69.61 cents per pound (0.453 kg), up 1.40 cents. The contract managed to close with gains of 2.05 per cent on Wednesday.
Brent crude oil edged up following the US Energy Information Administration (EIA) inventory report. Higher crude oil prices supported the polyester value chain, a substitute for cotton fibre.
Yesterday, trading volume reached 38,145 contracts, while 28,193 contracts were cleared the previous day. There was significant participation from traders. Open interest in cotton futures decreased slightly by 486 contracts, bringing the total to 231,505 contracts.
Regarding the weather, the current driving force in the market, Hurricane Francine, which made landfall on the Louisiana coast as a Category-2 storm, is credited for the two-day rally in cotton futures.
A significant amount of Delta cotton acreage remains unharvested. Francine may cause extensive damage to open bolls, likely affecting both the quality and quantity of the cotton crop. Rainfall forecasts range from 2 inches to 12 inches, with any amount of rain posing a threat to the crop.
Market participants are focusing on the upcoming monthly WASDE supply and demand report from the US Department of Agriculture for further market direction.
ICE cotton for December 2024 traded at 69.69 cents per pound, up 0.08 cents. Cash cotton traded at 64.81 cents (up 1.23 cents), the October contract at 69.31 cents (up 1.23 cents), the March 2025 contract at 71.23 cents per pound (up 0.06 cents), the May 2025 contract at 72.25 cents (down 0.11 cents), and the July 2025 contract at 73.14 cents (up 0.10 cents). A few contracts remained at the level of the last closing, with no trading noted today.
ALCHEMPro News Desk (KUL)
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