ICE cotton slips further due to technical resistance, weak demand

Yesterday, the ICE cotton March 2025 contract settled at 71.27 cents per pound (0.453 kg), down by 0.22 cents. The contract has lost 66 points in the last two days, signalling bearish momentum. Other contracts noted losses of 6 to 30 points on Tuesday.

The trading volume decreased significantly to 36,135 contracts, compared to 50,180 contracts in the previous session. According to the US Commodity Futures Trading Commission (CFTC), speculators reduced their net short positions in ICE cotton futures and options by 15,285 contracts for the week ending November 26, bringing the total net short positions to 36,410 contracts. ICE data reported no changes in deliverable No. 2 cotton futures contract inventories, which remained at 13,274 bales as of December 2.

The failure to break the 72.06 cents resistance level in recent trading sessions exerted downward pressure on prices, primarily as a technical reaction, with cotton prices remaining below critical levels.

Although demand has slightly stabilised after the recent market downturn, it remains relatively weak, with minimal contributions from China.

Traders are eagerly awaiting the USDA's weekly export sales report on Thursday, which will provide insights into cotton demand and export trends.

Broader financial markets remained mixed, with Wall Street indexes trading flat after record highs for the S&P 500 and Nasdaq on Monday.

In agricultural commodities, Chicago soybeans rose due to bargain hunting, although record production prospects in Brazil limited further gains. Wheat and corn rebounded from earlier losses, contributing to a more stable outlook in other agricultural markets.

Speculative trading activities and technical resistance levels continue to dominate cotton price movements, while traders monitor external market factors for further guidance.

Currently, ICE cotton for March 2025 is traded at 71.05 cents per pound (down 0.22 cent). Cash cotton is traded at 67.27 cents (down 0.22 cent), the December 2024 contract at 72.69 cents per pound (up 0.26 cent), the May 2025 contract at 72.27 cents (down 0.28 cents), the July 2025 contract at 73.18 cents (down 0.29 cent), and the October 2025 contract at 72.51 cents (down 0.06 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)