ICE cotton prices increased yesterday due to crop concerns caused by the hurricane and rising crude oil prices. Expensive crude oil makes polyester, an alternative fibre to cotton, more costly. However, the high level of the US dollar index was a negative factor for US cotton. Weak demand continued to be a concern for the market, and on Tuesday, ICE cotton contracts traded lower.

Yesterday, the ICE cotton December contract settled at 73.53 cents per pound (0.453 kg), up by 0.26 cents.

Crude oil prices surged by nearly 4 per cent yesterday. The risk of widespread conflict in the Middle East pushed Brent crude oil above $80 per barrel for the first time since August 2024. Higher crude oil prices supported cotton futures; however, the strong US dollar index limited ICE cotton gains. The dollar hovered at a seven-week high, discouraging cotton purchases by overseas buyers.

Market experts stated that ICE cotton found support due to concerns about crop damage. Hurricane Helene could cause significant losses to the cotton crop. North Carolina, Florida, and other parts of the southern US have been severely impacted by the tropical storm.

Nevertheless, weak demand did not support cotton futures. Experts suggested that if demand remained at a mid-range level, cotton futures could rise by up to 5 cents. However, demand has been bearish for several months.

Speculators have reduced their net short positions in ICE cotton futures and options by 3,507 contracts, leaving 33,427 contracts short as of October 1, according to CFTC data. ICE cotton futures contract stocks remained unchanged at 265 bales as of October 4, according to data from the Intercontinental Exchange.

The US Department of Agriculture (USDA) reported that 26 per cent of the US cotton crop had been harvested by October 6, compared to 20 per cent the previous week, 23 per cent at the same time last year, and a five-year average of 22 per cent.

The quality of US cotton decreased to 29 per cent good/excellent as of October 6, down from 31 per cent the previous week and 32 per cent at the same time last year.

Currently, ICE cotton for December 2024 was trading at 72.76 cents per pound, down by 0.77 cents. Cash cotton settled at 67.53 cents (up by 0.76 cents), the October contract at 73.29 cents (up by 0.26 cents), the March 2025 contract at 74.87 cents per pound (down by 0.75 cents), the May 2025 contract at 76.10 cents (down by 0.80 cents), and the July 2025 contract at 76.65 cents (down by 0.91 cents). A few contracts remained at the same level as the previous closing, with no trading activity reported today.

Source - https://www.fibre2fashion.com