Wed, Mar 11,
Insights
ICE cotton futures extended gains as a weaker US dollar made US cotton cheaper for overseas buyers, while higher crude oil prices supported cotton by raising polyester costs.
The May 2026 contract settled at 65.30 cents per pound with stronger trading volume.
However, geopolitical tensions and higher global stocks in the USDA's March WASDE report may limit further upside.
ICE cotton futures further gained on yesterday as US dollar dropped and crude oil gain. Weaker US dollar makes US cotton more attractive for overseas buyers. Rising crude oil also support cotton prices as it made polyester, a manmade fibre, more expensive. As US growers have already sold most of the cotton crop, selling pressure has eased.
The most traded May 2026 contract settled at 65.30 cents per pound, up 0.68 cent or 1.05 per cent. May contracts finished above 65 cents for the first time in last seven sessions. Other contracts closed 47-65 points higher, while December 2028 gained 95 points.
Trading volume was 75,454 contracts, the highest in the past 5 sessions, reflecting improved participation.
The market gained support from a weaker US dollar, which fell to a one-week low, making US cotton cheaper for overseas buyers. Relatively higher crude oil prices supported cotton as higher polyester costs improve cotton’s competitiveness.
Brent crude oil, despite a sharp daily drop, remains over 44 per cent higher year-to-date, still supportive for natural fibre demand.
Market sentiment improved with better profit margins at textile mills, steady buying of US cotton, and growers fixing on-call contracts. A large portion of the current crop is already out of growers’ hands, reducing potential selling pressure.
Market analysts said the combination of a weaker dollar and relatively high oil prices is supporting cotton prices.
Geopolitical tensions intensified after US and Israel carried out major airstrikes on Iran, the most intense since the conflict began, creating uncertainty for demand. Analysts warned that war-related uncertainty could weigh on consumer sentiment and limit upside in cotton prices.
According to USDA’s March WASDE, global cotton production for 2025-26 increased by 1.1 million bales, while global consumption forecast reduced by 140,000 bales. Global ending stocks projected at 76.4 million bales, up about 1.3 million bales, while US ending stocks remain unchanged at 4.4 million bales.
Analysts commented on WASDE report, global data appears slightly negative, but cotton is catching up with other commodities after previously being heavily discounted.
S&P 500 and Dow Jones declined, while Nasdaq posted a slight gain as investors assessed war risks and stagflation concerns.
Chicago soybeans rose on cross-market trading and expectations of progress in US trade talks with major importers. Corn and wheat futures declined, retreating from recent multi-year and multi-month highs.
This morning (Indian Standard Time), ICE cotton for May 2026 was traded at 65.51 cents per pound (up 0.21 cent), cash cotton at 63.30 cents (up 0.68 cent), the July 2026 contract at 67.37 cents (up 0.20 cent), the October 2026 contract at 68.99 cents (up 0.58 cent), the December 2026 at 69.95 cents (up 0.10 cent) and the March 2027 contract at 70.92 cents ((up 0.08 cent)). A few contracts remained at their previous closing levels, with no trading recorded so far today.