ICE cotton futures continued their upward momentum this week, driven by a wave of positive sentiment stemming from a new trade agreement between the United States and the European Union. The agreement has boosted confidence in global trade stability and sparked increased activity across commodities markets.
Adding to the bullish tone, crude oil prices also posted modest gains.
As oil strengthens, the cost of synthetic fibers like polyester tends to rise, often making natural fibers such as cotton more attractive.
This shift in market dynamics further supported cotton prices.
Meanwhile, strong U.S. cotton export sales added fuel to the rally. The latest USDA report showed a significant increase in weekly export commitments, reaching the highest level so far in the marketing year. China emerged as a major buyer, signaling renewed demand from a key market.
As a result, the May 2025 ICE cotton contract settled at 66.98 cents per pound—an increase of nearly 374 points over the past six sessions. Other nearby contracts also saw moderate gains ranging from 22 to 80 points.
The combination of improved trade sentiment, firm crude oil markets, and robust export activity has created a favorable short-term outlook for cotton. While the U.S. dollar has remained relatively stable in recent sessions, traders are closely watching for any shifts in macroeconomic conditions that could influence future price trends.
Overall, the cotton market appears poised for continued strength, supported by fundamentals and a more optimistic global trade environment.
