Textile

ICE cotton at two-month low, US export report shows mixed results

31 Jan '25
3 min read
ICE cotton at two-month low, US export report shows mixed results
Pic: Adobe Stock

Insights

ICE cotton futures continued to show further declines. A stronger US dollar index, selling pressure, and a choppy US cotton export report contributed to the bearish tone in the market. US cotton exports declined from the previous week but were higher than the four-week average shipment. A rising US dollar further discouraged demand for US cotton.

Yesterday, the ICE cotton March 2025 contract settled at 66.27 cents per pound (0.453 kg), down by 0.39 cents, marking the lowest level in over two months. It was just 25 points above its new contract low at 66.01 cents. Most cotton contracts saw declines ranging from 1 to 26 points. The July 2026 contract traded slightly higher.

The US dollar strengthened against currencies like the yen and euro, influenced by new tariff threats, slower than expected US economic growth, and a rate cut by the European Central Bank. A stronger US dollar makes cotton purchases more expensive for overseas buyers.

The trading volume reached 56,396 contracts, up from 45,262 the previous day, showing strong activity despite the ongoing Chinese/Asian Lunar New Year holiday observed in several countries. ICE reported that the inventory of deliverable No. 2 cotton futures contracts remained unchanged at 218 bales as of January 29.

The USDA reported US cotton export sales for the current marketing year at 280,000 bales for the week ending January 23, down 20 per cent from the previous week but up 20 per cent from the average of the previous four weeks.

The bearish tone in US cotton was attributed to selling pressure, although there was no specific bearish factor driving the market. The export sales report was fairly solid, although not as strong as the previous two weeks.

Chicago Board of Trade (CBOT) corn futures edged lower, consolidating after hitting a 15-month high the previous day, as dry weather in Argentina and slow planting in Brazil revived concerns about global supply.

Currently, ICE cotton for March 2025 was traded at 66.36 cents per pound (up 0.09 cent). Cash cotton was traded at 63.77 cents (down 0.39 cent), the May 2024 contract at 67.62 cents per pound (up 0.08 cent), the July 2025 contract at 68.79 cents (up 0.05 cent), the October 2025 contract at 69.16 cents (down 0.07 cent), and the December 2025 contract at 68.90 cents (up 0.02 cents). A few contracts remained at the level of the last closing, with no trading noted today.

Fibre2Fashion News Desk (KUL)
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