On Thursday, the ICE December cotton contract settled at 73.27 cents per pound (0.453 kg), up 0.54 cents. Earlier, it had hit its lowest level in a week.

Crude oil prices experienced their largest weekly gains in over a year as escalating military conflict in the Middle East raised concerns about supply disruptions in the global crude oil market. This price surge made the polyester value chain more expensive. Polyester, a cotton alternative, found significant support in ICE cotton prices. However, the rise was capped following US President Joe Biden’s statement urging Israel not to target Iranian oil infrastructure.

Additionally, the strengthening US dollar index, which rose by 0.6 per cent, has also limited gains in ICE cotton, making cotton purchases more expensive for overseas buyers.

According to market experts, the resolution of the port strike that disrupted US trade and shipping has improved market sentiment, particularly for commodities that were heavily impacted by the port closures. Ports along the US East and Gulf Coasts have resumed operations after dockworkers and port operators reached a tentative wage agreement, ending the largest port shutdown in nearly 50 years. Despite this, it will take some time to clear the backlog of cargo at these ports.

Trading volume on October 4 dropped to 25,709 contracts, the lowest in the past five weeks, compared to 40,065 contracts the previous day, indicating a sharp decline in activity. However, total open interest saw an unexpected rise of 5,913 contracts, reaching 238,697 contracts, the highest since April 9, 2024. The Commitment of Traders Report suggests that the increase was likely due to a combination of new trade shorts and speculative longs.

Traders are now focusing on weather conditions and potential improvements in demand in the coming days. Many are also awaiting the USDA WASDE report, due next week, for further insights.

ICE cotton for December 2024 settled on Friday at 73.27 cents per pound, up 0.54 cents. Cash cotton settled at 66.77 cents (up 0.54 cents), while the October contract settled at 73.03 cents (up 0.54 cents), the March 2025 contract at 75.28 cents (up 0.48 cents), the May 2025 contract at 76.52 cents (up 0.47 cents), and the July 2025 contract at 77.12 cents (up 0.46 cents).

Fibre2Fashion News Desk (KUL)