ICE cotton hits 2-week high on rate cut hopes, weak US dollar

The most active December 2025 contract on ICE settled at 67.68 cents per pound (0.453 kg), up 0.84 cent or 1.26 per cent. During the session, it touched 67.72 cents per pound, the highest level since August 26.

The US dollar fell sharply on Tuesday, hitting a four-year low against the euro as investors increased bets on an imminent Federal Reserve rate cut. A weaker dollar typically makes dollar-denominated commodities such as cotton cheaper for buyers using other currencies.

Market analysts noted that a Fed rate cut would ease borrowing costs for cotton farmers. However, they cautioned that if prices hit 68 cents per pound, selling pressure could push prices back toward 66 cents.

Traders are widely betting on a 25-basis-point cut by the Federal Reserve at its meeting this week.

According to the US Department of Agriculture (USDA), 52 per cent of the US cotton crop was rated good to excellent in the week ending September 14, 2025, compared with 54 per cent the previous week and 39 per cent in the same period last year. US’ cotton harvest was reported at 9 per cent, slightly lower than last year’s 10 per cent but above the five-year average of 8 per cent.

The USDA’s September crop supply and demand report, released on September 12, kept US cotton consumption, exports, and year-end stock estimates unchanged.

Other agricultural commodities also rallied, with wheat, corn, and soybean futures on the Chicago Board of Trade rising on strong export demand and a weaker dollar.

ICE data showed that as of September 15, deliverable No. 2 cotton contract stocks were steady at 15,474 bags.

Currently, ICE cotton for December 2025 was traded at 67.48 cents per pound (down 0.20 cent), cash cotton at 65.14 cents (up 0.97 cent), the October 2025 contract at 66.39 cents (up 0.97 cent), the March 2026 contract at 69.35 cents (down 0.22 cent), the May 2026 contract at 70.65 cents (down 0.21 cent) and the July 2026 contract at 71.48 cents (down 0.20 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

ALCHEMPro News Desk (KUL)