15 Jan '25
(Fibre2Fashion News Desk (KUL): ICE cotton futures slipped due to selling pressure and weaker crude oil. Falling crude oil makes polyester, a man-made alternative to cotton, cheaper for the textile sector.
However, a weaker dollar index capped the decline in US cotton. Analysts said that cotton futures may take a positive turn as they have come down to an attractive price level.
Insights
ICE cotton futures slipped due to selling pressure, weaker crude oil, and a weaker dollar index.
The March 2025 contract settled at 67.50 cents per pound, down by 0.14 cents.
Speculators increased net short positions to 51,936 contracts as of January 7.
Brazil's cotton production estimates were 3.6998 million tons for 2024-25.
Cotton prices are expected to attract demand in the coming weeks.
Yesterday, the ICE cotton March 2025 contract settled at 67.50 cents per pound (0.453 kg), down by 0.14 cents. Initially, it gained but faced technical resistance at 67.98 cents, leading to selling pressure to ease. Other contracts fell between 16 and 33 points yesterday.
NYMEX crude oil declined after a US forecast indicated stable demand for the current year, 2025, and a higher supply outlook. The decline in crude oil makes the polyester value chain cheaper. It also put pressure on cotton prices. The dollar index fell from higher levels, providing some relief to other commodities, but it failed to support cotton futures.
The session recorded a trading volume of 43,011 contracts, with 59,956 contracts cleared the previous day. Speculators increased net short positions in ICE cotton futures and options by 404 contracts, bringing the total to 51,936 contracts as of January 7. ICE deliverable No. 2 cotton futures contract stocks remained unchanged at 20,113 bales as of January 13.
CBOT soybean and corn futures also closed lower due to profit-taking and farmer selling after recent price highs. Brazilian National Supply Company (Conab) reported Brazil’s cotton production estimates at 3.6998 million tons for 2024-25 and 3.7014 million tons for 2023-24. Analysts said that cotton prices are low enough to attract demand and anticipate a better price structure in the coming weeks.
Presently, ICE cotton for March 2025 was traded at 67.39 cents per pound (down 0.11 cent). Cash cotton was traded at 65.00 cents (down 0.14 cent), the May 2024 contract at 68.56 cents per pound (down 0.14 cent), the July 2025 contract at 69.60 cents (down 0.12 cent), the October 2025 contract at 68.78 cents (down 0.20 cent) and the December 2025 contract at 69.26 cents (down 0.03 cents). A few contracts remained at the level of the last closing, with no trading noted today.
(Source: Fibre2Fashion.com)