Yesterday, the ICE cotton December contract settled at 67.24 cents per pound (0.453 kg), its lowest level since October 7, 2020. The price dropped to 66.56 cents following the export sales report. It is believed that the strong dollar and technical selling contributed to the price decline.

The US dollar index experienced an upward trend as concerns about the economy eased. US labour market data revealed that the number of Americans filing for unemployment benefits fell more than expected last week, reducing fears of a potential recession. A higher dollar index made cotton purchases more expensive for foreign buyers.

Yesterday, the trading volume was 32,421 contracts, with 27,168 contracts cleared. The inventory of ICE's deliverable No. 2 cotton futures contracts fell to 18,721 bales on August 7.

In the final report of the year, the USDA made a few adjustments. US cotton export sales for the 2023-24 marketing year increased by 190,800 tons, while export sales for 2024-25 decreased by 949,600 bales. Export shipments of cotton in 2023-24 were 738,100 bales, a 6 per cent decrease compared to the previous year.

On the weather front, warmer temperatures and limited rainfall are forecast across much of the cotton belt, which may affect crop conditions in the coming days.

Following the release of improved economic data, equity markets showed a good recovery. Cotton prices may also find some respite from selling pressure, with traders expecting demand to improve at lower levels.

Currently, ICE cotton for December 2024 is being traded at 67.53 cents per pound, up 0.29 cents. Cash cotton settled at 61.29 cents (down 0.68 cents), the October contract at 65.79 cents (down 0.68 cents), the March 2025 contract at 68.96 cents per pound (up 0.23 cents), the May 2025 contract at 70.46 cents (down 0.47 cents), and the July 2025 contract at 71.33 cents (down 0.42 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)