ICE cotton futures rebound on weak dollar, firm crude oil

ICE’s most active December 2025 contract settled at 66.21 cents per pound (0.453 kg), up 0.18 cent. Other contracts closed 12–20 points higher.

The US dollar index fell 0.4 per cent to 97.51 after Friday’s weak jobs report reinforced expectations of a September Federal Reserve rate cut. The dollar had already slipped more than 0.5 per cent on Friday. A weaker dollar makes dollar-denominated cotton cheaper for foreign buyers.

NYMEX crude oil futures also closed higher, recovering part of last week’s losses after OPEC+ announced a small output increase and markets weighed the possibility of further sanctions on Russian crude. Higher oil prices raised polyester costs—a cotton substitute—offering additional support to cotton demand.

Trading volume was 21,760 contracts compared with 21,077 in the previous session, while the three-session average daily volume stood at 21,871 contracts. Open interest rose by 1,326 contracts to 257,309, marking the 40th increase in the last 47 sessions.

Intercontinental Exchange data showed deliverable No. 2 cotton futures inventory unchanged at 15,474 packages as of September 5. Buyers continued favouring Brazilian and Australian cotton over US cotton. Analysts noted that cotton has been trading with low volatility and within tight ranges for some time, a trend expected to persist in the coming weeks.

The USDA crop progress report, released after market close on September 8, rated cotton crop quality at 54 per cent in the week ending September 7, up from 51 per cent the previous week and 40 per cent in the same week last year. The US cotton harvest was reported at 8 per cent, compared with 7 per cent a year earlier and a five-year average of 6 per cent.

On Wall Street, the Nasdaq closed at a record high, driven by a surge in Broadcom shares, while the S&P 500 also gained as investors bet the Federal Reserve will soon cut borrowing costs to support economic growth.

Currently, ICE cotton for December 2025 was traded at 66.23 cents per pound (up 0.02 cent), cash cotton at 63.32 cents (up 0.18 cent), the October 2025 contract at 64.66 cents (up 0.09 cent), the March 2026 contract at 68.19 cents (up 0.05 cent), the May 2026 contract at 69.56 cents (up 0.03 cent) and the July 2026 contract at 70.48 cents (up 0.05 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

ALCHEMPro News Desk (KUL)