ICE cotton futures climbed to a two-week high on Tuesday, supported by a weaker US dollar and growing expectations of an interest rate cut by the US Federal Reserve. The most-active December cotton contract rose by 1.26% to 67.68 cents per pound, touching a session high of 67.72 cents—its highest level since August 26.
Market analysts attribute the uptick primarily to the dollar’s recent slide, which makes dollar-denominated commodities like cotton more attractive to overseas buyers.
Investor sentiment was also buoyed by speculation that the Fed could ease monetary policy in the near future. Lower interest rates typically stimulate demand by making borrowing cheaper and encouraging investment in commodities and exports. As a result, traders are positioning themselves ahead of a possible rate cut, anticipating improved global demand for US cotton.
Meanwhile, the latest USDA crop progress report showed that 52% of the US cotton crop is rated in good-to-excellent condition, a slight decline from 54% the previous week but notably better than 39% during the same period last year. Around 9% of the crop has been harvested—just below last year’s 10%, but above the five-year average of 8%.
Despite the bullish sentiment, analysts caution that prices may face resistance near 68 cents per pound, where selling pressure could emerge. The USDA’s September report kept US cotton supply and demand estimates unchanged, with stable export and year-end stock projections, signaling no immediate disruption to the market’s fundamental outlook.
