Yesterday, the ICE cotton December contract settled at 68.68 cents per pound (0.453 kg), up 1.44 cents. The contract jumped more than 3 per cent during the session but settled with a gain of 2.14 per cent yesterday.

The US dollar index continued to slide for the second consecutive session. It has hit its lowest level since January 5, 2024, falling below the 102 levels. A weaker dollar made cotton purchases cheaper for foreign cotton buyers, increasing the demand for US cotton. However, the decrease in crude oil prices limits the rise in cotton futures. Cheaper oil, which makes polyester a more affordable man-made fibre, may dampen the cotton market. WTI crude oil fell below 75 dollars per barrel.

The trading volume was good, with 37,982 contracts reported, and 26,702 contracts cleared on Friday. According to the Intercontinental Exchange (ICE), the deliverable No. 2 cotton futures contract inventory fell to 12,767 bales as of August 16, down from 15,526 bales the previous day, indicating a tightening supply.

The US Department of Agriculture (USDA) released its weekly crop growth report, showing that the quality rate of US cotton was 42 per cent as of August 18, down from 46 per cent the previous week and 33 per cent during the same period last year.

The market is slowly getting into the range of 65-73 cents, as there is currently no major pressure for a further decline, nor is there significant demand to move higher.

Currently, ICE cotton for December 2024 is being traded at 68.84 cents per pound, up 0.16 cents. Cash cotton was traded at 63.48 cents (up 1.52 cents), the October contract at 67.98 cents (up 1.52 cents), the March 2025 contract at 70.31 cents per pound (up 0.25 cents), the May 2025 contract at 71.41 cents (up 0.20 cents), and the July 2025 contract at 72.09 cents (up 0.13 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)