Fri, Feb 06,
Insights
ICE cotton remains under sustained bearish pressure as a stronger US dollar, weaker crude oil and broad commodity softness continue to cap demand.
Rising open interest signals aggressive positioning rather than bargain buying.
Stable export sales have failed to lift sentiment, with traders now eyeing the next week's WASDE report for direction.
ICE cotton futures further decreased yesterday as stronger US dollar and falling crude oil put pressure on the market. Rising US dollar makes US cotton purchase more expensive for overseas buyers. Weaker crude oil made polyester, a man-made alternative of cotton, more competitive. Broad-base weakness across commodity markets also influenced cotton prices.
The most actively traded March cotton contract fell 0.48 cent to settle at 61.76 cents per pound. The contract hit a new low of 61.56 cent per pound, making the fourth consecutive session of new lows. May 2026 contracts ended at 63.50 cents per pound, down 0.49 cent. May contract also hit intraday low, the third consecutive closing low. July contract also touched a new low during the session.
The US dollar index climbed to a two-week high, intensifying selling pressure across global markets. A stronger dollar made US dollar-denominated cotton more expensive for overseas buyers, weighing on demand sentiment.
International crude oil futures closed nearly 3 per cent lower in volatile trading. Crude prices fell after the United States and Iran agreed to hold talks in Oman, easing concerns about Iranian oil supply disruptions. Lower crude oil prices reduce the cost of polyester fibre, a competing product to cotton, making polyester more attractive to buyers.
Total trading volume on ICE was 89,161 contracts, reflecting elevated activity. Open interest rose by 6,393 contracts to 386,418 contracts, reaching a new all-time high. Over the last 25 trading sessions, open interest increased in 24 sessions, with a cumulative rise of 86,846 contracts.
Goldman Sachs index roll activity is scheduled to begin on Friday, involving buying May contracts and selling March contracts, which is expected to further increase trading volume.
Market participants continue to observe persistent selling pressure, keeping cotton prices under downward pressure. Market analysts said that ongoing weakness and selling pressure are driving prices lower.
Global stock markets declined, while commodities such as gold and copper also weakened.
Current-season export sales were up 23 per cent from the previous week but 5 per cent below the four-week average. Despite stable export sales and shipments, market fundamentals were insufficient to trigger a price rebound.
Chicago Board of Trade soybean futures extended gains, supported by optimism over US soybean demand prospects.
Traders are increasingly focusing on the upcoming USDA World Agricultural Supply and Demand Estimates (WASDE) report due next week.
Brazil’s foreign trade secretariat, Secex, reported that Brazil exported 316,856.05 tons of cotton in January. Brazil’s January cotton exports were down 23.76 per cent compared with 415,603.74 tons exported in the same month last year.
ICE data showed that deliverable No. 2 cotton futures inventories stood at 47,653 bales as of February 4. ICE certified stocks increased sharply from 36,515 bales recorded the previous day.
This morning (Indian Standard Time), ICE cotton for March 2026 was traded at 61.70 cents per pound (down 0.06 cent), cash cotton at 59.76 cents (down 0.48 cent), the May 2026 contract at 63.44 cents (down 0.06 cent), the July 2026 contract at 65.20 cents (down 0.06 cent), the October 2026 contract at 67.17 cents (down 0.18 cent) and the December 2026 at 67.87 cents (down 0.13 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.