ICE cotton rebounds from monthly low as crude oil recovers

14 Nov '24

2 min read

ICE cotton rebounds from monthly low as crude oil recovers

Pic: Adobe Stock

Insights

ICE cotton futures saw a slight rebound after recent lows, capped by a stronger dollar.
Traders have shifted focus to the March 2025 contract, with trading volume remaining high.
Crude oil's recovery offset earlier price declines, easing polyester costs.
Other agricultural commodities showed mixed trends.
Traders await the USDA export sales report, with attention on Chinese demand.

ICE cotton futures recovered slightly after recent pressure drove them to a new monthly low, with gains capped by a stronger dollar. Crude oil also rebounded from significant losses. Previous declines in crude oil prices had exerted pressure on polyester, a synthetic alternative to cotton. Traders have shifted their focus from the December to the March 2025 ICE cotton contract. The market was closed on Thursday in observance of Veterans Day.

Yesterday, the ICE cotton March 2025 contract settled at 71.10 cents per pound (0.453 kg), up by 0.03 cents after touching a monthly low on Wednesday.

The US dollar index reached nearly a seven-month high, making cotton purchases more expensive for overseas buyers. Crude oil prices rose after nearing a two-week low as investors covered short positions. The earlier fall in crude oil had reduced polyester production costs, benefitting polyester as a cotton substitute.

Trading volume remained robust, with 91,091 contracts traded on the day, slightly below the previous day’s 93,134 contracts but close to the five-day average of 95,225 contracts—one of the highest volumes in cotton trading history.

Other agricultural commodities showed mixed performance: Chicago Board of Trade (CBOT) wheat futures fell to a 10-week low, while soybean and corn futures also recorded declines.

Cotton traders are closely monitoring the USDA’s weekly export sales report, which will be released on Friday, delayed due to Veterans Day. The report will focus on demand from China, the world's largest cotton consumer.

On Wednesday, the ICE cotton March 2025 contract settled at 71.05 cents per pound (up 0.05 cents). Cash cotton settled at 64.65 cents (up 0.13 cents), the December 2024 contract at 68.70 cents per pound (up 0.02 cents), the May 2025 contract at 72.39 cents (up 0.01 cents), the July 2025 contract at 73.55 cents (down 0.02 cents), and the October 2025 contract at 72.88 cents (up 0.01 cents).

Fibre2Fashion News Desk (KUL)

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