ICE cotton prices plunge to new low on weak demand

According to trade analysts, the July US cotton contract settled 300 points lower at 73.15 cents per pound (0.453 kg). The December contract settled at 73.35 cents, down 176 points on Friday. ICE cotton breached a very strong support level at 74 cents, a critical move in the market.

Yesterday's dollar index decline of more than 0.5 per cent strengthened foreign currencies. Crude oil prices plunged more than 3.5 per cent after inventory data was released, creating additional pressure on cotton prices as polyester became cheaper.

Yesterday's final volume of 72,670 contracts was one of the highest in over six weeks. Certified stocks started the day at 125,675 bales, with an increase of 2,260 new certificates and 3,073 bales pending review. Last week, there were 4,584 new certifications and 72,335 decertifications.

Good rains over the weekend in West Texas and Southwest Oklahoma temporarily improved drought conditions. US cotton areas are currently enjoying some of the most favourable weather conditions in recent years. Overall, US cotton is struggling to find buyers due to heavy competition from Brazil and Australia as US cotton is less attractive in terms of quality. Traders are looking for fundamental triggers to shift momentum, but this may take a long time. The technical bounce back is expected soon.

On Monday, ICE cotton July 2024 was traded 0.08 cent higher at 73.23 cent per pound. Cash cotton was traded at 69.40 cent (down 3.00 cent), October (new crop) contract 74.82 cents (up 0.72 cent), December 2024 contract 73.53 cents (up 0.18 cent), March 2025 75.23 cents per pound (up 0.05 cent) and May 2025 76.80 cents (up 0.03 cent).

Fibre2Fashion News Desk (KUL)