Average exports, favourable weather bring ICE cotton prices down

According to trade analysts, yesterday the ICE cotton December contract settled at 70.98 cents per pound (0.453 kg), down by 138 points. The March 2025 contract was down 1.34 cents to reach 72.71 cents. The December contract has reached a new three-week low. It has lost around 2.4 per cent in the week cumulatively.

The US dollar index came down significantly as expectations of a Fed rate cut were raised. However, it could not boost the momentum of the cotton market. Crude oil was slightly up yesterday, which made the polyester value chain costlier.

Yesterday, the trading volume remained average, with nearly 25,000 lots traded. ICE data as of July 3 showed a slight decrease of 1 bale in cotton stocks, with the deliverable inventory at 53,790 bales.

The market fell mainly due to potential rainfall from Hurricane Beryl in Texas, which can improve soil moisture and could lead to a higher-than-expected harvest.

The current market year export sales increased by 27 per cent to 115,400 bales from the previous week but were down 23 per cent from the four-week average, as per the USDA export sales report. The order booking for next year's export sales is 56,900 bales.

The USDA's monthly supply and demand report, to be released on July 12, is expected to show US crop production exceeding 17 million bales.

Traders are monitoring Hurricane Beryl's impact on southern Texas crops. Rainfall may benefit some crops, but at the same time, severe storms could cause damaging hail, flooding, and strong winds. Focus is also on the demand side at lower levels.

On Friday, ICE cotton for December 2024 settled 1.38 cents lower at 70.98 cents per pound. Cash cotton traded at 63.48 cents (down 1.37 cents), the July 2024 contract at 67.31 cents (down 1.37 cents), the October contract at 69.98 cents (down 1.37 cents), the March 2025 contract at 72.71 cents per pound (down 1.34 cents), and the May 2025 contract at 74.10 cents (down 1.30 cents).

Fibre2Fashion News Desk (KUL)