30 Jan '25
(Fibre2Fashion News Desk (KUL): ICE cotton futures declined for the third consecutive day as the rising US dollar and speculative selling pressure further dampened market sentiment. Farmers' selling also contributed to the bearish tone in US cotton. Although commodities and stocks were moving firmly, which were positive factors, the easing of crude oil added negative sentiment to the natural fibre.
Insights
ICE cotton futures declined for the third day due to a stronger US dollar and speculative selling, with farmers' sales adding pressure.
The March 2025 contract hit a low at 66.66 cents/lb.
Crude oil fluctuations and rising inventories weighed on cotton demand.
Analysts expect stabilisation as broader markets remain strong, with corn and soyabean prices rising.
Yesterday, the ICE cotton March 2025 contract settled at 66.66 cents per pound (0.453 kg), down by 0.32 cents, making a low in the contract. Other contracts also traded lower, between 2 points and 31 points. Crude oil prices closed further higher by 0.1 per cent, making dollar-priced cotton less attractive for foreign buyers. Crude oil saw a slight decline due to rising US crude oil inventories, which reduced concerns over Libyan supply disruptions. Lower oil prices make polyester, a cotton alternative, cheaper, further weighing on cotton demand.
The volume surged to 45,262 contracts, significantly higher than the previous day's 36,010 contracts, despite reduced market activity due to the Chinese/Asian Lunar New Year holiday. ICE No. 2 cotton futures inventory remained unchanged at 218 bales as of January 28. Speculative sellers continue to liquidate positions after every price rebound. Physical cotton producers are also selling their stock whenever prices rise, keeping the market under pressure. Market analysts believe cotton will stabilise as broader markets remain strong. Corn and soyabean prices increased.
Presently, ICE cotton for March 2025 was traded at 66.53 cents per pound (down 0.13 cent). Cash cotton was traded at 64.16 cents (down 0.32 cent), the May 2024 contract at 67.72 cents per pound (down 0.08 cent), the July 2025 contract at 68.86 cents (down 0.10 cent), the October 2025 contract at 69.23 cents (down 0.08 cent), and the December 2025 contract at 68.83 cents (down 0.09 cent). A few contracts remained at the level of the last closing, with no trading noted today.
(Source: Fibre2Fashion.com)