Tue, Mar 17,
|
Insights ICE cotton futures climbed to a over seven-month high, with the May 2026 contract settling at 68.19 cents per pound, driven by a weaker US dollar and continued fund short covering. Strong Brazil export data supported demand sentiment. However, falling crude oil prices capped gains by boosting polyester competitiveness. Overall sentiment remained bullish, with attention on global monetary policy cues |
.
ICE cotton futures jumped to a more than seven-month high yesterday, the first trading day of the week. The market was supported by a weaker US dollar and a reduction in speculative short positions. US cotton futures witnessed strong upward momentum, driven by macroeconomic cues and fund activity.
The most traded May 2026 contract settled at 68.19 cents per pound, up 2.34 cent or 3.55 per cent. May contracts had hit earlier an intraday of 68.75 cents, the highest level since July 2025.
US dollar declined 0.64 per cent to reach at 99.70, slipped from 10-month high, snapped 4-session rally ahead of central bank meeting. Dollar weakness improved buying power of importers holding other currencies, boosts cotton demand sentiment
According to CFTC data for week ending March 10, speculators reduced net short positions by 9,793 contracts to 33,488 contracts. Continuous short covering by funds triggered price rally acceleration. Funds actively exiting bearish positions, adding bullish tone in near term.
Market analysts said that a weaker US dollar and fund short covering were key drivers of the rally. However, a sharp decline in crude oil prices capped gains in the cotton market.
Lower crude oil prices reduce the cost of polyester fibre, a key synthetic substitute, thereby creating competitive pressure on cotton. Negative sentiment in the crude oil market also spilled over into the broader fibre market.
Brazil export data (Secex) informed that 172,330.85 tons Brazilian cotton exported in first two weeks of March. Brazil’s average daily exports were 17,233.09 tons, which was better than the average exports of 12,588.82 tons, last year. Strong Brazil export pace indicates robust global demand and active shipments.
ICE certified stocks of deliverable No.2 cotton) were 116,789 bales on March 13. Price rally also technically supported after breaking key resistance zone near 66–67 cents per pound.
Market attention is now focused on global monetary policy decisions, which may influence currency movements and fund flows. Overall sentiment remained bullish, although upside was limited due to weakness in crude oil and competitive pressure from polyester.
This morning (Indian Standard Time), ICE cotton for May 2026 was traded at 68.24 cents per pound (up 0.05 cent), cash cotton at 66.19 cents (up 2.34 cent), the July 2026 contract at 70.09 cents (up 0.03 cent), the October 2026 contract at 71.67 cents (up 2.06 cent), the December 2026 at 72.06 cents (up 0.08 cent) and the March 2027 contract at 72.99 cents (up 0.12 cent)). A few contracts remained at their previous closing levels, with no trading recorded so far today.