ICE cotton rebounds as dollar weakens, crude oil supports

According to trade analysts, the ICE cotton December contract settled at 73.39 cents per pound (0.453 kg) yesterday, up by 118 points. The July contract gained 310 points on its final settlement day and settled at 71.29 cents. However, it was not relevant for the current market.

The dollar index settled 0.4 per cent lower at 105.46 yesterday, making cotton purchases cheaper for foreign buyers in the US market. Meanwhile, crude oil gained 1 per cent as it found support from summer demand, tension in the Middle East, and supply concerns. A weaker dollar also contributed to the rise in crude oil prices.

The trading volume was very light, with a total of 20,796 contracts yesterday. According to data from ICE, as of June 21, the inventory for the no. 1 cotton futures contract was 127,978 bales, a decrease from 136,656 bales on the previous trading day.

The market is currently focused on the USDA's annual planting area report, scheduled for release on June 29. The USDA's weekly crop growth report indicated that as of the week of June 23, 56 per cent of US cotton was rated as excellent, an improvement from 54 per cent the previous week and 49 per cent in the same period last year. The US cotton planting rate was reported at 94 per cent, up from 90 per cent the previous week, compared to 93 per cent during the same period last year and a five-year average of 96 per cent.

On Monday, ICE cotton for July 2024 traded 3.10 cents higher at 71.29 cents per pound. Cash cotton traded at 66.28 cents (up 0.27 cents), the October (new crop) contract at 72.41 cents (up 0.13 cents), the December 2024 contract at 73.32 cents (down 0.07 cents), the March 2025 contract at 74.73 cents per pound (down 0.10 cents), and the May 2025 contract at 76.11 cents (down 0.03 cents). A few contracts were seen at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)