Cotton futures on the Intercontinental Exchange (ICE) dropped to a one-month low due to an increase in Brazilian cotton exports.
As of the latest trading session, the most-active December cotton contract fell by 0.
78% to 84.99 cents per pound, marking its lowest point since mid-November.
The decline is attributed to a rise in Brazilian cotton sales, which have become more competitive in the global market. Brazil’s cotton exports surged, partly due to favorable weather conditions and high-quality crop yields, positioning it as a major supplier. These factors have helped drive up Brazil’s market share, potentially taking market share away from the U.S. cotton, especially as the Brazilian crop becomes available for export in larger quantities.
Moreover, U.S. cotton export sales remained weak, with traders noting that the demand for cotton from traditional markets like China has been slower than expected. The global cotton market, already under pressure from macroeconomic concerns, is now facing additional competition from South American producers.
Cotton market participants are also keeping an eye on the upcoming U.
S. Department of Agriculture (USDA) reports for further guidance on supply and demand dynamics. Analysts are particularly concerned about the U.S. cotton harvest, which, though good in quality, is not expected to meet earlier expectations.
Overall, ICE cotton’s recent decline highlights the impact of shifting global dynamics, including Brazil’s growing export presence, on the market outlook for cotton in the coming months.
