ICE cotton futures edged higher after a two-day decline, supported by weather concerns, stronger crude oil prices and positive sentiment from China’s state cotton reserve auction.
However, profit booking limited gains, while light trading volume signalled cautious market sentiment.
Traders continue to watch US weather, export demand, and Chinese reserve purchases for clearer direction.
Weather remained the market’s primary supportive factor. The latest USDA Crop Progress Report showed 45 per cent of the US cotton crop rated good-to-excellent, up from 44 per cent the previous week, although still below 57 per cent recorded at the same time last year. Analysts continued to monitor hot and dry conditions across key US cotton-growing regions, particularly in West Texas, where moisture concerns persist.
Market analysts said weather continues to dominate market sentiment, noting that forecasts still indicate high temperatures and dry conditions across key production regions, preventing traders from turning aggressively bearish despite the recent correction.
Trading volume totalled just 32,026 contracts, compared with 40,829 contracts on Friday, making it the lightest trading session since July 2 and well below last week’s average of 49,225 contracts. This suggested limited market conviction behind the rebound.
China’s first state cotton reserve auction was completed, with 8,006 tonnes (approximately 35,200 statistical bales) sold. The cotton offered consisted mainly of US and Brazilian origin, with only a small quantity from Xinjiang. While the auction was considered too small to materially influence the market, it confirmed that Chinese mills continued purchasing US cotton.
China’s Zhengzhou Commodity Exchange (ZCE) cotton futures posted their largest daily gain since June 30, reflecting improved sentiment among Chinese mills and traders, possibly driven by short covering and optimism surrounding reserve purchases.
Broader agricultural markets also supported cotton. CBOT soybean and corn futures moved higher as traders continued to monitor adverse weather across parts of the US Midwest, while concerns over global grain supplies remained supportive.
Crude oil prices strengthened amid ongoing geopolitical tensions involving Russia and Ukraine and continued security concerns over shipping through the Red Sea. Higher crude oil prices increased the production cost of polyester fibre, thereby improving cotton’s competitiveness against synthetic fibres.
There was little additional US cotton-specific news, with no weekly export sales report or major crop progress surprises to influence trading. The session was largely driven by weather, outside markets, and China’s reserve auction.
Overall, Monday’s recovery reflected weather-related support and improved sentiment from China, but the weak finish and very light trading volume suggest the market is still waiting for stronger confirmation through improved export demand, larger Chinese reserve auctions, and continued weather risks before establishing a sustained uptrend.
This morning (Indian Standard Time), ICE cotton for December 2026 traded at 79.41 cents per pound (up 0.49 cent), cash cotton at 73.62 cents (up 0.55 cent), the October 2026 contract at 77.37 cents (up 0.30 cent), the March 2027 contract at 80.78 cents (up 0.49 cent), the May 2027 contract at 81.69 cents (up 0.47 cent), and the July 2027 contract at 81.48 cents (up 0.50 cent). A few contracts remained unchanged from their previous closing levels, with no trading recorded in them so far today.
Fibre2Fashion News Desk (KUL)
