ICE cotton trades lower, dollar strength offsets crude gains

ICE cotton futures declined after touching a near one-week high on Tuesday. US cotton came under pressure as a stronger US dollar discouraged buying by making the commodity costlier for foreign buyers. However, a rise in crude oil prices helped limit losses in cotton trading, as higher crude prices make polyester fibre—a man-made alternative to cotton—more expensive.

ICE’s most active December 2025 contract settled at 67.55 cents per pound (0.453 kg), down 0.47 cent. The contract had reached its highest level since June 10 during Monday’s session. The July 2025 contract settled at 65.05 cents, down 0.39 cent. Cotton prices remained within a near five-week sideways trading range, ending 10 to 47 points lower across the board.

ICE cotton futures dipped after nearing a one-week high, pressured by a stronger US dollar that reduced demand from overseas buyers.
However, rising crude oil prices limited losses by increasing polyester costs, making cotton more competitive.
December 2025 contracts fell 0.47 cent to 67.55 cents/lb.
Despite geopolitical tensions, no disruption in oil supply occurred.

Trading volume for the day stood at 44,411 contracts, compared to 50,092 contracts cleared on the previous day.

The US dollar strengthened against major currencies, making dollar-priced cotton more expensive for buyers using other currencies and thereby dampening demand.

Crude oil prices rose amid ongoing tensions between Israel and Iran, providing support to cotton as the cost of producing polyester—a substitute for cotton—also increased.

Market analysts noted that while the market moved slightly higher on Monday, the rise in the dollar acted as a negative factor, whereas the increase in crude oil was a supportive influence.

Despite the Israel-Iran conflict, there has been no significant disruption to oil and gas infrastructure or flow so far. Nonetheless, higher crude prices have elevated polyester production costs, offering indirect support to cotton prices.

The USDA is scheduled to release its annual planted acreage report on June 30.

As of now, ICE cotton for July 2025 is trading at 65.20 cents per pound (up 0.15 cent), cash cotton at 64.88 cents (down 0.17 cent), October 2025 at 65.98 cents (down 0.15 cent), December 2025 at 67.74 cents (up 0.19 cent), March 2026 at 68.91 cents (up 0.17 cent), and May 2026 at 69.99 cents (up 0.21 cent). A few contracts remained at their previous closing levels, with no trading recorded today.

Fibre2Fashion News Desk (KUL)