Yesterday, the ICE cotton December contract settled at 69.98 cents per pound (0.453 kg), down 0.28 cents. The market remained range-bound on Tuesday.

Crude oil weakened by around 1.5 per cent from higher levels, making polyester cheaper, which was a negative factor for the natural fibre. However, the declining dollar index helped limit losses for cotton. Geopolitical risks and upcoming US inflation data may impact the Federal Reserve's decision on a rate cut.

Overall trading volume was slightly down, with nearly 22,000 lots traded. Open interest was at 228,653, down by 257 lots. According to ICE data, as of August 26, the deliverable No. 2 cotton futures contract inventory decreased slightly to 9,147 bales from 9,413 bales the previous day.

The market was concerned about severe flooding in India, Bangladesh, and northern China, caused by heavy rains, which could impact cotton supply and demand.

Traders are monitoring the geopolitical situation, demand scenario, and weather conditions around the world on a long-term basis. The US cotton export sales report, which will be released tomorrow, may provide more insight into current demand levels.

Currently, ICE cotton for December 2024 was traded at 69.40 cents per pound, down 0.58 cents. Cash cotton was traded at 65.52 cents (down 0.56 cents), the October contract at 70.02 cents (down 0.56 cents), the March 2025 contract at 71.07 cents per pound (down 0.51 cents), the May 2025 contract at 72.25 cents (down 0.52 cents), and the July 2025 contract at 72.91 cents (down 0.48 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)