ICE cotton declines on spillover from external market weakness

The most actively traded March cotton contract eased 0.32 cents, or 0.49 per cent, to settle at 64.34 cents per pound. The contract recorded an intraday high of 64.97 cents per pound. The May and July 2026 contracts also fell by 27 points and 22 points, respectively. However, the remaining contracts across the board finished higher by 1 to 17 points.

Trading volume reached 56,942 contracts, compared with 34,274 contracts cleared on Friday. The average daily volume for the previous week was 53,895 contracts. Open interest rose by 1,732 contracts to 336,725, marking the fifth consecutive all-time high. Open interest has now increased for 13 straight sessions, adding a total of 37,153 contracts.

Despite the sharp rise in volume and open interest, prices have shown limited movement, indicating a disconnect between participation and price direction.

Demand for US cotton remained strong, with ongoing sales activity reported in the export market. US growers are approaching the end of the current crop marketing season. Early expectations suggest US cotton acreage next year may remain unchanged or rise slightly, as alternative crops do not appear significantly more profitable.

According to market analysts, cotton prices continue to find good technical support, although they retreated from intraday highs due to weakness in broader external markets.

US equity markets declined to near three-week lows as investors reacted negatively to renewed tariff threats from President Donald Trump towards Europe related to the Greenland control dispute.

Chicago grain and soybean futures also edged lower, weighed down by geopolitical tensions between Washington and Europe, as well as ample global supplies.

Export sales are being closely monitored week by week, with recent reports highlighting strong US cotton sales and steady shipment progress.

Data from the Intercontinental Exchange showed deliverable No. 2 cotton futures inventory remained unchanged at 11,029 bales as of January 16.

This morning (Indian Standard Time), ICE cotton for March 2026 was settled at 64.40 cents per pound (up 0.06 cent), cash cotton at 62.09 cents (down 0.32 cent), the May 2026 contract at 66.00 cents (up 0.04 cent), the July 2026 contract at 67.48 cents (up 0.05 cent), the October 2026 contract at 68.26 cents (up 0.06 cent), and the December 2026 contract at 69.11 cents (up 0.04 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.

ALCHEMPro News Desk (KUL)