The most active December 2026 contract settled at 79.79 cents up 2.04 cent, closing near the psychologically important 80-cent level. The expiring contract July 2026 settled at 77.02 cents per pound up 2.01 cent.
ICE cotton futures rose for a fifth consecutive session, driven by speculative buying, short covering, and strong call-option activity.
The benchmark December 2026 contract settled at 79.79 cents per pound, close to the key 80-cent level.
Rising open interest, robust options trading and firm deferred spreads reflected growing confidence in higher cotton prices.
Total ICE cotton futures volume increased sharply to 81,372 contracts, reflecting growing participation from both speculative and commercial traders. Spread trading accounted for 19,479 contracts, representing approximately 48 per cent of total daily volume.
The July/December spread settled at a 289-point December premium, widening from 274 points the previous day. The widening premium reflects stronger buying interest in December futures relative to the nearby July contract. July open interest declined to 8,555 contracts as the contract approaches First Notice Day. Market participants expect July-related spread activity to diminish rapidly as expiry approaches.
The absence of delivery concerns in July continues to shift trading interest towards deferred contracts. The December/March spread remained the most actively traded spread for a second consecutive session. A total of 7,603 December/March spreads were traded during the day.
Traders continued to pay a carry premium for deferred cotton deliveries despite the inversion in nearby contracts, reflecting confidence in longer-term demand. The market structure remained supportive, with front-month contracts staying inverted while deferred contracts maintained positive carry. Meanwhile, options activity surged during the session, indicating heightened market participation and positioning
Total options volume climbed to 27,511 contracts, an increase of approximately 72 per cent from the previous session. Open interest also rose by 2,271 contracts, signalling the addition of fresh positions to the market. The combination of rising open interest and strong call-option activity suggests the build-up of new bullish positions rather than merely the liquidation of existing trades.
Market participants are increasingly targeting a sustained move above the 80-cent level in December futures. Technical traders continue to focus on the 50-day moving average near 80.49 cent per pound as the next major resistance level. A successful breakout above that level could trigger additional momentum buying and options-related hedging activity.
Traders noted that a substantial number of call options would move into the money if December cotton futures established themselves above key resistance levels. Such a breakout could further accelerate upward momentum by triggering additional dealer hedging activity. Conversely, a decline below the 20-day moving average of 78.77 cents per pound could undermine the recent bullish sentiment and increase downside pressure on the market.
Market attention is now shifting towards upcoming US export sales data. Traders expect export demand figures to provide important confirmation of whether the recent rally is supported by improving fundamentals. Strong export sales could reinforce bullish sentiment and justify further gains. Weak demand figures, however, could challenge the sustainability of the current advance.
Overall market sentiment remained bullish, with strong buying interest in the December contract, stable deferred spreads, and aggressive call-option activity signalling increasing confidence among traders that cotton prices could move higher in the coming weeks.
Total ICE cotton futures volume reached 81,372 contracts, while options volume climbed to 27,511 contracts.
This morning (Indian Standard Time), ICE cotton for December 2026 was traded at 79.15 cents per pound (down 0.64 cent), cash cotton at 75.17 cents (up 1.64 cent), the July 2026 contract at 75.96 cents (down 0.94 cent), the October 2026 at 79.17 cents (up 1.64 cent), the March 2027 contract at 80.47 cents (down 0.62 cent) and the May 2027 contract at 81.26 cents (down 0.77 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)
