43 C
Lahore
Wednesday, June 19, 2024

ICE cotton prices have plummeted to a new low due to sluggish demand

Weak underlying factors pushed ICE cotton prices to a new annual low this Monday. The downturn was fueled by substantial losses in crude oil, which dampened sentiment in the US cotton market, compounded by a softer dollar index that failed to bolster demand for the natural fiber. A depreciating dollar typically makes US cotton more appealing to international buyers.

Trade analysts noted that the July US cotton contract closed 300 points lower at 73.15 cents per pound, while the December contract settled at 73.35 cents, down 176 points from Friday. The breach of the 74 cents support level marked a significant development in the market dynamics.

Monday saw a notable increase in trading activity, with the final volume reaching 72,670 contracts, one of the highest in over six weeks. Certified cotton stocks began the day at 125,675 bales, witnessing an uptick of 2,260 new certificates with 3,073 bales awaiting review. Last week, 4,584 new certifications were issued alongside 72,335 decertifications.

While recent rains in West Texas and Southwest Oklahoma offered temporary relief from drought conditions, US cotton faces stiff competition from Brazil and Australia due to perceived quality differentials. Despite favorable weather conditions in US cotton regions, finding buyers remains a challenge.

Traders are eagerly awaiting fundamental triggers to reverse the downward momentum, though a substantial turnaround might take time. Nonetheless, a technical rebound is anticipated in the near future.

In Monday’s trading, ICE cotton for July 2024 edged slightly higher to 73.23 cents per pound. Cash cotton was exchanged at 69.40 cents (down 3.00 cents), while the October (new crop) contract saw a rise to 74.82 cents (up 0.72 cent). December 2024 contracts were at 73.53 cents (up 0.18 cent), March 2025 at 75.23 cents per pound (up 0.05 cent), and May 2025 at 76.80 cents (up 0.03 cent).

Related Articles

Stay Connected

11,285FansLike
394FollowersFollow
9,300SubscribersSubscribe

Latest Articles