ICE cotton futures surged 3.82 per cent as stronger demand expectations, adverse US weather, and optimism over US-China agricultural trade lifted buying.
The December contract settled at 81.29 cents per pound, its highest since June 2, with trading volume surging.
Higher crude oil and grain prices also supported cotton, while markets now await USDA export sales and CFTC positioning reports.
July, October, and December contracts all finished just 1 point below the daily 300-point limit-up, while other nearby contracts gained 98 to 299 points. Only the three most distant delivery months declined by 70 points.
December futures opened slightly weaker, down just 2 points from the previous close, before rallying steadily throughout the session. The contract hit its intraday low at the opening and closed at the day’s high. During the final eight minutes of trading, December futures briefly tested the daily limit-up level.
Trading volume surged to 88,745 contracts, the highest since June 11, when 123,082 contracts traded, compared with 36,901 contracts cleared in the previous session, indicating a sharp increase in market participation.
Market analysts said unfavourable weather and improving demand expectations could increase buying interest in cotton. The dry conditions in Texas and generally hot weather across key producing regions remain major concerns for crop development.
The latest USDA Crop Progress Report showed 46 per cent of the US cotton crop rated Good-to-Excellent, down from 48 per cent the previous week and 52 per cent a year earlier, indicating continued deterioration in crop conditions. The USDA also reported that 49 per cent of the US cotton crop had reached the squaring stage, up from 37 per cent the previous week, and above 47 per cent both last year and the five-year average.
Market participants also pointed to expectations that China may soon purchase US cotton, following recent US soybean sales to China and improving sentiment surrounding US-China agricultural trade.
Additional optimism came after President Donald Trump invited President Xi Jinping to visit the White House later this year during their May meeting, supporting a broader risk-on sentiment across agricultural markets.
CBOT grain markets also traded higher, although gains were smaller than the previous session, continuing to provide support to the agricultural commodity complex.
Crude oil prices rebounded, with NYMEX crude oil futures rising 2.7 per cent, recovering part of the previous session’s losses as stronger demand expectations and supply concerns supported energy markets. Higher crude oil prices also improved cotton’s competitiveness relative to polyester fibre.
Reports that wildfires near Turkey’s Ceyhan export terminal could disrupt crude oil shipments also contributed to the recovery in oil prices.
In contrast, US equity markets finished lower, although weakness in stocks had little impact on cotton’s strong upward momentum.
Market attention now shifts to this week’s CFTC Commitments of Traders (COT) Report and the USDA Weekly Export Sales Report, both of which are expected to provide fresh insight into speculative positioning and export demand.
The latest CFTC data showed that, for the week ended June 30, ICE cotton speculators reduced their net long position by 3,740 contracts to 54,512 contracts, indicating some profit-taking before the recent rally.
This morning (Indian Standard Time), ICE cotton for December 2026 was traded at 80.75 cents per pound (down 0.54 cent), cash cotton at 75.71 cents (up 2.99 cent), the July 2026 contract at 76.94 cents (up 2.99 cent), the October 2026 at 79.71 cents (up 2.99 cent), the March 2027 contract at 80.17 cents (down 0.51 cent) and the May 2027 contract at 83.01 cents (up 0.46 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)
