ICE cotton prices dropped significantly due to reports of a strong cotton crop in the US and Brazil, as well as speculative trading in response to the WASDE report and US sanctions on Chinese products. US cotton prices fell by up to 300 points in the previous trading session, with the July contract settling at 74.63 cents per pound and the December contract at 74.18 cents.
External factors had less impact on the market yesterday as the dollar index eased and crude oil declined, putting pressure on cotton. The decline in cotton was attributed to a good crop in the US and Brazil, with favorable weather conditions in US growing areas. Brazil’s higher cotton output, as reported by CONAB, has positioned the country as a major world cotton supplier, impacting US cotton markets.
Speculators increased pressure by building their positions, with a trading volume of 52,995 contracts. Open interest has been rising for six sessions, starting at 221,251 contracts. Certified stocks dropped to 165,265 bales due to decerts. ICE cotton for July 2024 traded lower at 73.87 cents per pound, while cash cotton traded at 70.38 cents. The October, December, March, and May 2025 contracts also saw decreases in trading prices. Overall, the market continues to face pressure from high stock quantities, impacting buyers.
