ICE cotton prices dip amid low trading volume before holiday

Yesterday, the ICE cotton December contract settled at 72.36 cents per pound (0.453 kg), down by 34 points. The March 2025 contract was down 0.34 cents to reach 74.05 cents, according to trade analysts.

The US dollar index eased 0.5 per cent to reach its lowest level since June 13 this year. It was noted at 105.31 after the Federal Reserve meeting. The US central bank indicated the beginning of easing policy rates. An easing dollar limits the decline in cotton futures.

Yesterday, the trading volume was notably low at 18,012 contracts, the lowest in 2024 so far. The volume declined just before the holidays. Certified cotton stocks began today at 53,791 bales, down by 426 bales due to decertifications, with no bales awaiting review. There were expectations of seeing improvement in the trade in the coming week when the WASDE report will be released. The open interest increased by 1,365 contracts, totalling 210,048 contracts.

Weather came to centre stage as Hurricane Beryl is approaching South Texas, which could impact cotton crops positively or negatively. An extensive heatwave is expected across the US, with extreme temperatures forecast in key cotton-growing regions. Cotton drought conditions are expanding compared to last week. It is now noted at 19 per cent, up by 3 per cent.

On Wednesday, ICE cotton for December 2024 traded 0.34 cents lower at 74.05 cents per pound. Cash cotton traded at 64.85 cents (down 0.65 cents), the July 2024 contract at 68.68 cents (down 0.65 cents), the October contract at 70.85 cents (down 0.65 cents), the March 2025 contract at 74.05 cents per pound (down 0.34 cents), and the May 2025 contract at 75.40 cents (down 0.35 cents).

Fibre2Fashion News Desk (KUL)