ICE cotton rises on short covering amid improved market sentiment

The most active March 2026 cotton futures settled at 63.43 cents per pound, up 0.33 cent.

Market analysts said trade-side activity remains healthy and spot trading is providing fundamental support. Short covering is emerging as prices remain near historically low levels.

According to CFTC data for the week ended November 25, speculators cut net short positions by 5,398 contracts. Total speculative net short positions declined to 66,081 contracts. The reduction in net shorts indicates easing bearish sentiment and cautious optimism.

Demand remained a concern despite improved positioning and sentiment. Cotton prices are still extremely low, with earlier-year levels seen as the next support zone, although some downside risk remains.

Macro markets were mixed as crude oil rose more than 1 per cent. Higher oil prices were supportive for polyester fibre, a man-made alternative to cotton. US stocks fell yesterday. Wheat and soybeans declined for the fourth consecutive day, while corn rose.

Deliverable No. 2 cotton inventories stood at 12,396 bales on December 16, slightly lower than 12,474 bales in the previous session.

This morning (Indian Standard Time), ICE cotton for March 2026 was trading at 63.59 cents per pound (up 0.16 cent), cash cotton at 61.18 cents (up 0.33 cent), the May 2026 contract at 64.73 cents (up 0.20 cent), the July 2026 contract at 65.74 cents (up 0.16 cent), the October 2026 contract at 65.04 cents (up 0.18 cent) and the December 2026 contract at 67.28 cents (up 0.09 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.

ALCHEMPro News Desk (KUL)