ICE cotton recovers due to rise in grains and drier weather in US

Yesterday, ICE cotton December contract settled at 70.56 cents per pound (0.453 kg), up by 0.20 cents. The contract had touched as low as 69.93 cents on Monday, which was lowest level since September 16.

Crude oil continued to decline as supply concerns eased. Earlier in the session, it had risen by around 1 per cent due to plans of US government to purchase strategic petroleum reserves.

The trading volume for cotton futures was 35,951 contracts on Tuesday. The cleared contracts from Monday were 37,709. The average volume over the past five sessions has been 37,291 contracts per day. ICE data from October 28 showed no change in the deliverable stock of No. 2 cotton futures, with the inventory holding at 174 bales.

According to market experts, the market recovered after rise in the grain markets. There were higher buying activities in grain and crude oil markets.

Drier conditions are expected across much of the US crop belt this week, which will aid in drying and harvesting cotton. US cotton is expected to remain range bound between 68-72 cents.

Key economic data scheduled for release this week includes US consumer confidence, Gross Domestic Product (GDP), and personal consumption expenditures (PCE) – the Federal Reserve’s preferred inflation measure.

Currently (at the time of writing this), ICE cotton for December 2024 is trading at 70.55 cents per pound (down 0.01 cent). Cash cotton is trading at 66.80 cents (up 0.20 cent), the March 2025 contract at 72.76 cents per pound (up 0.02 cent), the May 2025 contract at 74.35 cents (up 0.07 cents), the July 2025 contract at 75.45 cents (up 0.06 cent) and the October 2025 contract at 74.06 cents (up 0.39 cents). A few contracts remain at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)