ICE cotton prices hit a fifteen-month low due to declining crude oil prices, despite the Fed maintaining high rates to combat inflation. Trade analysts reported that US cotton contracts dropped significantly in the last month, with July settling at 76.05 cents per pound and December at 75.17 cents.
The US dollar Index initially strengthened but weakened after the Fed meeting. Cotton prices were supported by a lower dollar index, but oil prices dropping 3 per cent affected cotton prices negatively.
Wednesday saw significant trading volume with 56,592 and 59,615 contracts traded, indicating strong market activity. Open interest for July increased, possibly due to new speculative short positions. Certified stocks in the ICE Cotton exchange started at 183,114 bales, with some new certifications and de-certifications, and 1,700 bales awaiting review. The cotton industry faces challenges with lower prices benefiting mills but causing difficulties in purchasing strategies amidst price instability. US growers could suffer financial losses if prices do not improve, potentially discouraging sowing in the US.
During Thursday’s trading session, ICE cotton prices for various contracts fluctuated. The July 2024 contract rose by 0.61 cents to 77.12 cents per pound, while Cash cotton decreased to 72.26 cents. Other contracts also experienced fluctuations.
