According to trade analysts, the US cotton July contract settled 191 points higher at 82.43 cents per pound (0.453 kg). The December contract settled at 79.12 cents, up 111 points on Tuesday.
ICE cotton prices rose on Tuesday due to crop concerns, increasing crude oil prices, and a weaker dollar.
US cotton reached a monthly high of 83 cents before settling near 82 cents.
Despite a technical rally, most contracts traded lower on Wednesday.
Analysts report strong support from lower levels, with prices above key moving averages.
Yesterday, the dollar index traded lower, making cotton purchases cheaper for foreign buyers. Crude oil prices also recovered from low levels, settling with gains of over 3 per cent. This made the polyester value chain costlier, which was positive for cotton trade.
The trading volume was 49,727 contracts, compared to 45,220 contracts cleared on Friday. Open interest started at 230,689 contracts, down 839 from Friday, marking the second decrease in the last 15 sessions. Certified stocks began the day with 193,426 bales, an increase of 621 new certified bales.
Technically, the market received good support from lower levels and the recent rally. Prices closed above the 10, 20, and 40-day moving averages for both July and December contracts, indicating strong bullish sentiment.
The market is currently focusing on weather conditions across the globe. In the US, heavy rains caused crop damage in some areas, but it is too early to predict the exact losses. Traders are waiting for the US export sales report. The markets are currently in a liquidation phase, which could lead to more erratic trading patterns.
On Wednesday, ICE cotton July 2024 traded 0.25 cents lower at 81.82 cents per pound. Cash cotton traded at 78.68 cents (up 1.91 cents), October (new crop) contract at 81.48 cents (down 0.16 cents), December 2024 contract at 78.75 cents (down 0.18 cents), March 2025 at 80.48 cents per pound (down 0.12 cents), and May 2025 at 81.68 cents (down 0.18 cents).
Fibre2Fashion News Desk (KUL)
