06 Feb '25
(Fibre2Fashion News Desk (KUL): ICE cotton futures closed lower due to concerns about US trade policies and their effects on global cotton demand. Buyers were cautious amid concerns of trade tensions between the US and its major trading partners. A stronger US dollar also made cotton purchases more expensive, which hurt demand for the natural fibre.
Insights
ICE cotton futures closed lower amid concerns over US trade policies and a stronger dollar, making cotton costlier for overseas buyers.
The March 2025 contract settled at 66.04 cents per pound, down 0.09 cents.
Profit-taking in soyabeans and corn added pressure.
Market sentiment weakened amid economic uncertainties.
Investors await the USDA's export report for further demand insights.
Yesterday, the ICE cotton March 2025 contract settled at 66.04 cents per pound (0.453 kg), down by 0.09 cents. The contract erased the gains of the previous trading session. The May contract also settled down 85 points at 67.20 cents.
The US dollar index inched up again after easing on Tuesday. An increase in the US dollar makes cotton purchases more expensive for overseas buyers, hurting market sentiment in US cotton trade.
The trading volume was 78,956 contracts, lower than the previous two sessions but still significant. ICE's deliverable No. 2 cotton futures inventory remained unchanged at 218 bales as of February 4.
Market participants expressed concerns about US trade policies and their effects on global cotton demand. The market remains cautious amid ongoing trade uncertainties and broader economic developments.
Profit-taking in soyabeans and corn spilled over into the cotton market, adding downward pressure. CBOT corn and soyabean futures also fell sharply after reaching multi-month highs earlier in the week. US stocks declined due to disappointing earnings from Alphabet and AMD, raising concerns about AI investment returns.
Investors are awaiting the USDA's weekly export sales report for further insights into cotton demand.
Currently, ICE cotton for March 2025 is trading at 65.94 cents per pound (down 0.10 cent), cash cotton at 63.54 cents (down 0.90 cent), the May 2024 contract at 67.10 cents per pound (down 0.10 cent), the July 2025 contract at 68.25 cents (down 0.09 cent).
The October 2025 contract at 68.93 cents (down 0.54 cent), and the December 2025 contract at 68.66 cents (down 0.06 cent). A few contracts remained at the level of the last closing, with no trading noted today. (Source: Fibre2Fashion.com)