ICE cotton prices surged recently, driven by robust demand from China, alongside short-covering and a rise in crude oil prices. However, the gains were tempered by a strengthening dollar, which has made cotton more expensive for international buyers. The March 2025 cotton contract settled at 70.77 cents per pound, marking an increase of 0.34 cents, with weekly gains hitting 2.7 percent, the most significant rise since September.
China played a crucial role, leading with exports of 21,400 tons of US cotton. The demand from China indicates solid market dynamics, while the upward trend in crude oil prices has further bolstered cotton’s market position. Nevertheless, the dollar’s recent climb to a 13-month high has restricted additional gains, making cotton purchases pricier for overseas customers.
Trading activity witnessed a decline, dipping to 29,105 contracts, the lowest in seven weeks, signaling a market in transition as it moves into the holiday season. Analysts indicate that record short positions have pushed traders to cover their positions, contributing to the market rebound.
For the March 2025 contract, it settled at 70.77 cents per pound, reflecting a rise of 0.34 cent. Cash cotton also increased, settling at 66.77 cents. Other futures contracts also showed positive movement, with the December 2024 contract 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).
