ICE cotton prices slip despite positive factors, crude oil gains

ICE cotton prices continued to decline for the third consecutive day yesterday, despite positive external factors and crop concerns, which typically support cotton futures. However, ICE cotton prices did not respond to these positive signals. Hurricane damaged cotton crops in key producing regions of the US.

Yesterday, the ICE cotton December contract settled at 72.72 cents per pound (0.453 kg), down by 0.3 cent.

ICE cotton prices fell for the third consecutive day, with the December contract settling at 72.72 cents per pound.
Despite positive external factors and crop concerns, weak demand weighed on the market.
Hurricane Helene caused potential crop damage in Georgia, but the market response remained muted.
Crude oil prices rose but failed to boost cotton.

Crude oil prices rose on Friday but registered weekly losses due to expectations of higher global supply and new Chinese stimulus measures. Earlier, crude oil had traded lower, making polyester, a cheaper alternative to cotton. The gains in crude oil were insufficient to support cotton prices.

The market was primarily affected by weak demand, despite concerns about potential crop damage from Hurricane Helene in Georgia, a significant cotton-growing region. Initial estimates of potential cotton loss due to the storm ranged between 300,000 and 500,000 bales. However, these figures remain speculative, as it is too early for precise damage assessments.

Hurricane Helene was initially classified as a Category 4 storm but was downgraded to a tropical storm by the US National Hurricane Centre as it moved inland towards Georgia. Although crop damage related to the storm was expected, the market response was muted. The sideways to lower market trend suggested that demand concerns outweighed the supply risks.

Trading volume on ICE cotton futures was 36,854 contracts, and the number of cleared contracts on Thursday was 40,696 contracts. Open interest started the day at 230,255 contracts, down by 593 contracts from the previous session.

ICE data released on September 26 showed that deliverable No. 2 cotton futures contract inventory remained unchanged at 265 bales.

The ICE cotton December 2024 contract settled yesterday at 72.72 cents per pound, down by 0.30 cent. Cash cotton settled at 66.22 cents (down 0.30 cent), the October contract at 73.54 cents (down 0.32 cent), the March 2025 contract at 74.52 cents (down 0.25 cent), the May 2025 contract at 75.61 cents (down 0.26 cent), and the July 2025 contract at 76.08 cents (down 0.26 cent).

Fibre2Fashion News Desk (KUL)