Yesterday, the ICE cotton December contract settled at 72.70 cents per pound (0.453 kg), down by 40 points, according to trade analysts. The March 2025 contract was down 0.37 cents to reach 74.39 cents.

Crude oil faced pressure and eased from its higher range. Weak crude oil prices put pressure on cotton futures as cotton substitute polyester becomes cheaper with lower crude oil prices. However, a weaker dollar index limited the downfall in cotton futures. A weaker dollar made cotton cheaper for foreign buyers.

Due to the holiday (early close), trading volume was very light. The final trading volume was noted at 21,817 contracts compared to the previous day's 27,909 contracts. The ICE cotton exchange reported a reduction in deliverable cotton futures contract inventory to 54,217 bales as of July 1. The certified stocks began the day at 54,217 bales, down 4,818 bales due to decertifications, with zero bales awaiting review.

There were some weather issues, including extreme heat in the Far West and other cotton-growing regions. The possibility of a hurricane in South Texas was also a notable event. Although it may not directly land, the market was not showing any significant triggers for the same.

US Federal Reserve chairman Powell mentioned signs of disinflation but noted that more evidence is needed before considering interest rate cuts. This weakened hopes for an early rate cut by the US Fed.

During the late session on Wednesday, ICE cotton for December 2024 traded 0.12 cents higher at 72.82 cents per pound. Cash cotton traded at 65.50 cents (down 0.74 cents), the July 2024 contract at 69.33 cents (down 0.74 cents), the October contract at 72.82 cents (up 0.12 cents), the March 2025 contract at 74.44 cents per pound (up 0.05 cents), and the May 2025 contract at 75.77 cents (up 0.02 cents). A few contracts were seen at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)