The most active March 2026 cotton futures settled at 65.05 cents per pound, up 0.41 cent. The contract has gained 1.05 cents per pound over the past two days. The March 2026 contract touched an intraday high of 65.76 cents, the highest level in nearly two months.
Oil prices fell amid expectations of ample global supply and uncertainty surrounding Venezuelan crude.
Trading activity was very strong, with 90,224 contracts traded; 63,621 contracts were cleared from the previous session. ICE deliverable No. 2 cotton stocks stood at 11,510 bales as of January 5, unchanged day on day. Open interest ended at its highest level since November 3, 2023, indicating growing market participation.
Price support came from expectations of reduced US planting area and improving price signals from China. Despite the rally, the market continues to face weak global demand and higher production potential in other countries.
Some analysts highlighted bullish divergence and cotton being undervalued relative to gold, supporting a recovery narrative. Overall bullish sentiment had fallen to a 19-year low in mid-December, suggesting bearish exhaustion.
Speculators have been net buyers for most of the past 11 weeks, while still holding a net short position, which could fuel further short covering. Technically, March cotton held a double bottom at 6,297–6,311, signalling a possible medium-term bottom.
China’s ZCE cotton futures have strengthened for seven consecutive weeks, with the active contract at its highest level since July 3, 2024.
Inquiries for US cotton have been active, with some fresh sales reported. Grower selling increased at higher prices, supported by government loan deficiency payments.
Market analysts said ICE prices are gradually aligning with higher Chinese cotton and yarn prices while factoring in lower US acreage.
The imbalance in unpriced old-crop cotton orders has largely been corrected, as buyers and sellers fixed prices.
Brazil cotton exports in December reached 452,491.44 tons, up 28 per cent year on year; average daily exports rose 22 per cent year on year to 20,567.79 tons.
US equities closed higher, with the Dow Jones Industrial Average and the S&P 500 hitting record highs, adding to broader risk-on sentiment.
This morning (Indian Standard Time), ICE cotton for March 2026 was trading at 65.33 cents per pound (up 0.27 cent), cash cotton at 62.81 cents (up 0.41 cent), the May 2026 contract at 66.67 cents (up 0.24 cent), the July 2026 contract at 67.95 cents (up 0.21 cent), the October 2026 contract at 67.75 cents (down 0.64 cent), and the December 2026 contract at 69.20 cents (up 0.14 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
ALCHEMPro News Desk (KUL)
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