Yesterday, the ICE cotton December contract settled at 73.20 cents per pound (0.453 kg), down by 0.89 cents. The contract had reached a three-month high on Tuesday.

The dollar index recovered by 0.5 per cent due to a short-covering rally. A stronger dollar made cotton purchases more expensive for overseas buyers. Weakness in crude oil prices also added pressure on US cotton. Crude oil dropped more than 2 per cent on Wednesday after concerns over supply from Libya eased. Prolonged worries about global demand further weighed on crude oil prices. The stimulus package in China did not offer any support for demand prospects. However, a decrease in US crude oil inventories and tensions in the Middle East limited the losses. Cheaper crude oil reduced the production cost of polyester, a cotton alternative.

The volume of cotton contracts traded was 32,851, significantly lower than the previous day’s 52,710 contracts. Total open interest increased by 1,045 contracts, reaching 230,371 contracts, marking the first rise in six sessions.

Traders are awaiting the USDA’s weekly export sales data, due to be released today, for further insights into cotton demand. They are also monitoring the potential impact of Hurricane Helene on cotton crops in major US growing regions, particularly in Florida, with the storm's latest position reported near Tampa by the US National Hurricane Centre.

Currently, ICE cotton for December 2024 is trading at 73.73 cents per pound, up 0.53 cents. Cash cotton traded at 66.70 cents (down 0.89 cents), while the October contract traded at 74.02 cents (up 0.92 cents), the March 2025 contract at 75.52 cents per pound (up 0.52 cents), the May 2025 contract at 76.66 cents (up 0.54 cents), and the July 2025 contract at 77.09 cents (up 0.46 cents). A few contracts remained at the previous closing level, with no trading observed today.

Fibre2Fashion News Desk (KUL)