24 Apr '25
(Fibre2Fashion News Desk (KUL): ICE cotton futures continued to rise yesterday, supported by indications that US President Donald Trump would ease his hard stance on tariffs with China. The US signalled a willingness to engage in talks with China to reduce reciprocal tariffs. The market also found relief from concerns over tensions between the Trump administration and the Federal Reserve. However, caution remained over long-term demand prospects.
Insights
ICE cotton futures rose yesterday, boosted by US President Trump's plan to ease tariffs on Chinese goods, which improved market sentiment.
The July 2025 contract closed at 69.03 cents per pound, up 1.81 cents, while the back contracts saw mixed results.
Trading volume surged, and stronger directional trading was noted.
Fed's support and Trump's stance further reinforced cotton prices.
The ICE cotton July 2025 contract settled at 69.03 cents per pound (0.453 kg), up 1.81 cents from the previous day. The contract gained 221 points over the last two sessions. The December contract settled at 69.97 cents, up 1.26 cents, with a 167-point gain over the past two sessions. Other contracts posted gains between 35 and 171 points.
However, the back four contracts (farthest delivery months) closed lower by 26 to 51 points, possibly due to profit-taking or uncertainty surrounding long-term demand.
Trading volume surged to 73,307 contracts, significantly higher than the 43,105 contracts traded on April 22. Notably, only about 42 per cent of the volume on April 23 was from spread trading, compared to around 70 per cent the previous day.
This suggests stronger outright directional trading and growing speculative interest. According to ICE data, deliverable stocks for the No. 2 cotton futures contract remained unchanged at 14,478 bales on April 22, reflecting stable certified inventories despite the price rise.
Market sentiment improved significantly after President Trump announced his intention to ‘significantly reduce’ tariffs on Chinese goods, easing concerns about prolonged trade tensions between the world's two largest economies.
Supporting this, US Treasury Secretary Benson labelled high tariffs as ‘unsustainable’ and signalled a softer stance, stating that the trade war is likely to ease soon. Trump also urged the Federal Reserve to cut interest rates and reassured markets that he has no intention of removing Fed chairman Jerome Powell, providing additional macroeconomic support for commodities like cotton.
According to market analysts, the improved sentiment seems to have affected the cotton market, confirming that geopolitical and macroeconomic signals are now directly influencing cotton prices.
Currently, ICE cotton for July 2025 is trading at 68.90 cents per pound (down 0.13 cents). Cash cotton is trading at 67.28 cents (up 1.81 cents), the May 2025 contract at 66.47 cents (down 2.28 cents), the October 2025 contract at 70.37 cents (down 0.02 cents).
The December 2025 contract at 69.91 cents (down 0.06 cents), and the March 2026 contract at 70.97 cents per pound (down 0.07 cents). Some contracts remained at the same level as the last closing, with no trading noted today. (Source: Fibre2Fashion.com)