Yesterday, the ICE cotton December contract settled at 70.93 cents per pound (0.453 kg), up by 0.38 cent. The March 2025 contract was higher by 0.32 cents, reaching 72.73 cents, according to trade analysts.

Federal Reserve chair Jerome Powell, in his testimony to the House Committee on Financial Services, indicated that economic risks are now more balanced, enabling a broader focus beyond merely reducing inflation. He added that he is closely monitoring for any signs of weakness in both the labour market and the wider economy. These remarks by Powell affected the dollar index which went down yesterday.

A weaker dollar made cotton cheaper for international buyers, improving the prospects of good demand. Crude oil also improved after significant weakness in previous sessions, escalating the cost of the polyester value chain, which was positive for cotton.

According to ICE data, as of July 9, the deliverable no. 2 cotton futures contract inventory stood at 53,790 bales, the same as the previous trading day.

Although traders are waiting for the USDA WASDE report, it may not provide the bullish tone that market experts expect. If cotton production remains high while demand is weak, prices might face downward pressure. The market is likely to remain range-bound, without significant upward or downward movement.

On Thursday, ICE cotton for December 2024 traded 0.86 cents higher at 71.79 cents per pound. Cash cotton traded at 63.83 cents (up 0.70 cents), the October contract at 69.33 cents (up 0.20 cents), the March 2025 contract at 73.60 cents per pound (up 0.87 cents), the May 2025 contract at 74.99 cents (up 0.87 cents), and the July 2025 contract at 75.87 cents (up 0.62 cents).

Fibre2Fashion News Desk (KUL)