Tue May 20,
Insights
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ICE cotton futures rebounded from a one-month low, supported by technical buying and a weaker US dollar following a credit rating downgrade.
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July 2025 cotton rose 0.75 cent to 65.64 cents/lb, though it remains down 278 points over 10 sessions.
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Broader agricultural optimism and short covering aided gains.
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US planting progress reached 40 per cent, while Brazil's May cotton exports fell 15.44 per cent.
ICE cotton futures rebounded from the one-month low touched in the previous session, supported by technical buying and a weaker US dollar. A broader upward trend in agricultural commodities also contributed to the positive sentiment around US cotton.
The ICE cotton July 2025 contract settled at 65.64 cents per pound (0.453 kg), up 0.75 cent from the previous day. It marked only the second gain in the past 10 sessions. Despite Monday’s rise, the contract has posted a net loss of 278 points over the last 10 sessions. The December 2025 contract settled at 68.34 cents, up 67 points, but still registered a net loss of 164 points over the same period. Other contract months gained between 25 and 74 points, reflecting a broad-based recovery across cotton futures.
The US dollar index weakened significantly on Monday, falling to its lowest level in over a week against major safe-haven currencies such as the Japanese yen, Swiss franc, and euro. This decline followed a surprise credit rating downgrade of the US government late on Friday, adding pressure on the greenback amid escalating trade tensions. A weaker dollar typically supports commodities like cotton by making them cheaper for overseas buyers trading in other currencies, thereby enhancing export competitiveness
Daily trading volume on ICE was 36,852 contracts, indicating decent participation, compared to 31,130 contracts cleared on the previous business day.
Market analysts noted that the contract found solid technical support around the 65 cents level, making it an attractive buying zone. Short covering by speculators likely contributed to the day’s upward movement. However, the market is expected to remain range-bound unless a concrete trade deal is finalised and tangible benefits for cotton emerge.
In broader commodity markets, CBOT grain futures—including soybeans, corn, and wheat—also traded higher, signalling a positive sentiment across the agricultural complex.
According to the Brazilian Foreign Trade Secretariat (Secex), Brazil exported 101,623.82 metric tons of cotton during the first three weeks of May 2025. The average daily export volume was 9,238.53 tons, representing a 15.44 per cent decline compared to the daily average of 10,925.42 tons in May 2024. This indicates a slower pace of Brazilian cotton shipments this year.
The US Department of Agriculture (USDA) released its weekly crop progress report for the week ending May 18, 2025. According to the report, US cotton planting stood at 40 per cent complete, up from 28 per cent the previous week (May 11). For comparison, 42 per cent had been planted during the same period in 2024, and the five-year average is 43 per cent. Although planting progress is improving, it still slightly lags the five-year average, keeping market focus on weather developments and field conditions in key growing states.
At present, ICE cotton for July 2025 is trading at 65.43 cents per pound (down 0.21 cent), cash cotton at 63.89 cents (up 0.75 cent), the October 2025 contract at 68.32 cents (up 0.74 cent), the December 2025 contract at 68 cents (down 0.34 cent), the March 2026 contract at 69.35 cents per pound (down 0.34 cent), and the May 2026 contract at 70.32 cents (down 0.32 cent). A few contracts remained at their previous closing levels, with no trading recorded today.