ICE cotton futures fell slightly on Thursday, driven by a stronger dollar index and a cautious approach to the market.
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The limited market movement comes as traders anticipate the USDA’s cotton export sales report, which is expected to provide valuable insights into current demand dynamics.
Cotton prices fall slightly
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According to trade analysts, the December contract for ICE cotton settled at 72.62 cents per pound (0.453 kg), marking a decline of 14 points.
Likewise, the March contract fell 9 points to close at 73.96 cents per pound.
Selling pressure was noted above the 73 cent level, contributing to the modest price decline.
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The strengthening dollar index, which stood above the 105 level, had a negative impact on commodities, including cotton, making US exports more expensive for foreign buyers.
Despite the stability of crude oil prices, the rising dollar has been a key factor in discouraging purchases of cotton in the US market.
Reduced trading volume and certified stock movements
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After the holidays, ICE cotton saw very low trading volumes. Volume was just 32,185 contracts on Thursday, the lowest in four weeks.
Certified inventory began the day at 136,187 bales, with 811 new certifications and 1,687 decertifications. Additionally, there were 4,442 bales awaiting review.
The USDA also reported an increase in drought conditions in cotton-growing areas, now at 9%, up 1% from the previous week.
Some regions of Texas and Oklahoma are experiencing warmer conditions, requiring immediate precipitation to prevent crop damage.
Mixed performance between different contracts
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ICE cotton for July 2024 traded 0.44 cents lower on Thursday, closing at 70.41 cents per pound. Cash cotton prices were at 65.88 cents, down 1.94 cents.
The October contract (new crop) traded at 71.88 cents, also down 1.94 cents. Meanwhile, the December 2024 contract settled at 72.36 cents per pound, down 0.26 cents, and the March 2025 contract closed at 73.69 cents per pound, down 0.27 cents .
The May 2025 contract saw a slight decline of 0.328 cents, closing at 74.96 cents per pound. Some contracts traded at previous closing levels, indicating mixed activity in the market.
Preview of USDA Cotton Export Sales Report
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Traders are eagerly awaiting the USDA’s cotton export sales report, which is expected to shed light on the current demand scenario.
This report could serve as a crucial trigger for the market, influencing future price movements and trading strategies.
The cotton market remains sensitive to external factors such as currency fluctuations and weather conditions.
The strengthening dollar has made U.S. cotton less competitive in the global market, while drought conditions in key growing regions continue to pose a threat to crops.
As the market navigates these challenges, traders and analysts will be closely monitoring the USDA report and other relevant data to make informed decisions.
The next few weeks will be critical in determining the direction of cotton prices and overall market sentiment.
This article was translated from English with the help of AI tools, and subsequently proofread by a local translator.
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