ICE cotton continues decline, reversing earlier gains

According to trade analysts, the US cotton July contract settled 161 points lower at 76.15 cents per pound (0.453 kg). It lost nearly 500 points in the last two sessions. The December contract settled at 75.11 cents, down 140 points on Friday.

Although the US dollar index remained weak, which provides a window for foreign buyers for cheaper purchases, the market faced headwinds and did not see any major support from external factors.

The trading volume was good on Friday. A total of 54,163 contracts were traded in the market, and 57,462 contracts were cleared yesterday. Another surprising factor yesterday was the decline in certified stocks. Certified stocks remain at 123,415 bales, down 10,033 bales.

The major pressure came from weak export sales data in yesterday's session. The export sales data showed a 9.71 per cent increase in cotton bookings for the week ending May 23, totalling 222,632 RB. This increase was also a 3-week high, with China being the major purchasing country with 191,900 RB.

A major setback was seen in slow shipments, which were an 18-week low at 172,195 RB. Exports to China were the lowest since November, at 52,540 RB. Shipment data indicates a significant drop, negatively influencing market sentiments.

Weather conditions were becoming more favourable after good rains in the South Texas regions. Overall, traders found nothing exciting in the markets to shift the momentum.

On Friday, ICE cotton July 2024 settled 1.61 cents lower at 76.15 cents per pound. Cash cotton was traded at 72.40 cents (down 1.61 cents), October (new crop) contract at 76.58 cents (down 1.43 cents), December 2024 contract at 75.11 cents (down 1.40 cents), March 2025 at 76.79 cents per pound (down 1.50 cents), and May 2025 at 78.27 cents (down 1.52 cents).

Fibre2Fashion News Desk (KUL)