ICE cotton further down for third session in a row, crude oil eases

Yesterday, ICE cotton December contract settled at 70.36 cents per pound (0.453 kg), down by 0.30 cents. It has touched as low as 69.93 cents, lowest level since September 16. The contract has lost 215 points in the last three trading sessions consecutively. 

Crude oil dropped around $4 per barrel as concerns eased over supply disruptions. The price slipped after reports indicated that Israel’s attacks spared Iranian oil facilities. Lower crude oil prices reduced cost of production of polyester fibre.

The trading volume on Monday was 37,709 contracts, compared to 37,949 contracts cleared on Friday. The CFTC report for the week ending October 22 showed that speculators reduced their net short positions in cotton by 4,829 lots, totalling 32,017 lots. The net short position was 7,357 lots, down 3,285 lots from the previous week, marking a nearly five-month low. Long positions increased by 1,433 lots to 65,842, while short positions decreased by 1,852 lots to 73,199.

The USDA’s weekly crop report showed US cotton quality rated at 33 per cent, down from 37 per cent the previous week but higher than 29 per cent last year. US cotton harvest progress reached 52 per cent, compared to 44 per cent last week, 47 per cent last year, and the five-year average of 46 per cent.

Grain markets, including soybeans and corn, also saw declines due to higher US production, contributing to the pressure on cotton prices.

The market’s focus this week is on US economic indicators such as consumer confidence, GDP, and personal consumption expenditures (PCE), which is the Fed’s preferred inflation gauge. Traders are also closely monitoring the upcoming weekly export sales report for further market cues.

Currently, ICE cotton for December 2024 was traded on Friday at 70.10 cents per pound (down 0.26 cent). Cash cotton was traded at 65.86 cents (down 0.30 cent), the March 2025 contract at 72.29 cents per pound (down 0.25 cent), the May 2025 contract at 73.94 cents (down 0.16 cents), the July 2025 contract at 75.08 cents (down 0.11 cent) and the October 2025 contract at 73.67 cents (down 0.32 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)