ICE cotton futures experienced a rise driven by robust demand from China, alongside short covering and increasing crude oil prices. However, these gains were somewhat restrained by a strengthening U.S. dollar, which rendered cotton more expensive for international buyers. The March 2025 contract wound up settling at 70.77 cents per pound, an increase of 0.34 cents, marking a weekly gain of 2.7 percent—the highest since September.
As the market shifts into the holiday season, trading volumes have seen a decline, with activity dropping to 29,105 contracts, the weakest turnout in seven weeks, compared to 34,339 contracts just a day prior. Notably, China has emerged as a major player, leading with 21,400 tons of U.S. cotton exports, underscoring significant demand from the region.
The recent climb in crude oil prices, which surged by 6 percent this week in light of developments tied to Russia and Ukraine, added upward momentum for U.S. cotton. However, the dollar index has now reached a 13-month peak, limiting the market’s upward trajectory as the stronger dollar elevates costs for foreign cotton purchasers.
Analysts highlighted that a record level of short positions had been established in the market, contributing to the recent rebound as traders began to cover these positions. The market appears poised for lighter trading activity in the days ahead, which is typical during the holiday period.
For March 2025, cotton futures settled at 70.77 cents per pound, reflecting a modest uptick of 0.34 cents. Cash cotton prices likewise climbed to 66.77 cents. Meanwhile, other contracts also saw gains: the December 2024 contract settled at 71.65 cents (up 2.46 cents), May 2025 at 71.89 cents (up 0.24 cents), July 2025 at 73.00 cents (up 0.20 cents), and October 2025 at 71.65 cents (up 0.11 cents).
As cotton markets continually shift and adapt, the interplay of demand from leading importers and currency fluctuations remains a critical focus for stakeholders across the textile industry.
