ICE cotton struggles to hold gains as momentum fades

Cotton once again showed a familiar pattern of brief bullish momentum followed by a quick fade. The 105-point rise in March futures during Monday–Tuesday raised optimism in an otherwise quiet market, but selling pressure over the past two sessions has dampened sentiment and stalled the rally.

Trading volume reached 59,725 contracts, compared with 64,388 contracts in the previous session, indicating steady but not aggressive participation. Prices gravitated towards session lows, reflecting the market’s ongoing difficulty in extending rallies.

The USDA weekly export sales report was weak but largely expected due to the holiday-shortened week and had little immediate impact on prices. Net sales totalled 124,800 bales, dominated by Upland cotton.

Some buying interest emerged from index fund rebalancing by Goldman Sachs and Bloomberg, though its influence so far appears limited. Meanwhile, China’s ZCE cotton futures closed lower after six consecutive gains, suggesting profit-taking following the recent rally.

Market participants noted that cotton remains range-bound, with mild bullish undertones as long as recent lows hold. Analysts continue to caution against chasing rallies, favouring buying on dips until a clear technical breakout confirms stronger upside momentum.

This morning (Indian Standard Time), ICE cotton for March 2026 was settled at 64.48 cents per pound (up 0.02 cent), cash cotton at 62.21 cents (down 0.39 cent), the May 2026 contract at 65.95 cents (up 0.02 cent), the July 2026 contract at 67.39 cents (up 0.08 cent), the October 2026 contract at 67.85 cents (down 0.25 cent) and the December 2026 contract at 68.88 cents (up 0.06 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.

ALCHEMPro News Desk (KUL)