ICE cotton prices have recently been on a downward trend, primarily influenced by a stronger US dollar and weak oil prices.
Cotton futures have experienced a bearish sentiment, with prices falling in five of the past six trading sessions. The March and July 2025 contracts reached their lowest levels in recent weeks. A significant factor contributing to this downturn is the strengthening the US dollar.
A stronger dollar makes cotton more expensive for foreign buyers, which reduces global demand and further depresses prices. In addition, the decline in oil prices has added pressure to the market. The reduction in oil prices is tied to rising US refined product inventories, signaling lower demand. This, in turn, impacts the cost of producing polyester fiber, which is a competitor to cotton in the textile industry.
Traders have turned their focus toward later contracts, shifting their strategies away from immediate concerns. This adjustment has resulted in reduced volatility in the market.
The industry is awaiting key reports from the US Department of Agriculture (USDA) for potential market-moving information that could influence cotton prices.
Despite these concerns, in May 2025 ICE cotton futures settled at 66.87 cents per pound, marking a 0.50 cent decline. As the market navigates through these challenges, it is expected to remain weak in the near term. The combination of a stronger dollar and sluggish oil prices suggests that cotton prices may face continued pressure in the coming weeks.
