Yesterday, the ICE December cotton contract settled at 73.03 cents per pound (0.453 kg), up by 1.76 cents. The weaker US dollar and improved sentiment in financial markets, following the 50-basis point rate cut by the Federal Reserve, helped support US cotton prices. These positive developments lifted market sentiment in commodity trading.

The US dollar index slipped by 0.38 per cent to 100.64, making cotton purchases more attractive for overseas buyers. The index had fallen as low as 100.21 in the previous session, marking its lowest level in 13 months.

Data from ICE showed that, as of September 18, the deliverable No. 2 cotton futures contract inventory remained steady at 265 bales.

According to the USDA Weekly Export Sales Report, US cotton export sales for the current marketing year totalled 106,800 bales for the week ending September 12. This represents a decrease of 8 per cent compared to the previous week and a 23 per cent drop from the four-week average. However, export sales for the next marketing year increased by 10,600 bales during the same week.

The market is currently shifting from a rising interest rate environment to a falling interest rate model. A weaker dollar could further boost exports, and December cotton prices may climb to around 76 cents.

At present, ICE cotton for December 2024 is trading at 73.40 cents per pound, up by 0.37 cents. Cash cotton traded at 666.53 cents (up by 1.76 cents), while the October contract rose to 71.58 cents (up by 1.90 cents). The March 2025 contract increased to 74.91 cents per pound (up by 0.31 cents), the May 2025 contract reached 75.85 cents (up by 0.24 cents), and the July 2025 contract climbed to 76.25 cents (up by 0.18 cents). A few contracts remained unchanged, with no trading activity noted today.

Fibre2Fashion News Desk (KUL)