ICE cotton dips as strong dollar, weak grains weigh on market

ICE cotton futures closed lower as a stronger US dollar made US cotton more expensive for overseas buyers. Weakness in the grain market also spilled over into cotton. Traders are awaiting a clearer outlook from the US export sales report due later today.

ICE’s most active December 2025 contract settled at 66.17 cents per pound (0.453 kg), down 0.47 cent—its fourth-lowest close of 2025. Other contracts ended 25–49 points lower.

The dollar gained against the yen, Swiss franc, and euro after Federal Reserve Chair Jerome Powell adopted a cautious stance on further easing. A stronger dollar index makes dollar-denominated cotton futures more expensive for holders of other currencies.

International oil prices climbed nearly 3 per cent on Wednesday, hitting a seven-week high. US crude inventories unexpectedly fell last week, while exports from Iraq, Venezuela, and Russia faced disruptions, raising supply concerns. Higher oil prices have lifted polyester costs, making cotton comparatively more attractive.

Trading volume stood at 25,380 contracts, down from 37,880 the previous day. ICE data showed that as of September 23, deliverable No. 2 cotton futures contract inventory remained unchanged at 15,474 bags.

The market continues to challenge US growers, with cash sales proving difficult for both buyers and sellers. However, buying interest has not disappeared, and inquiries have occasionally picked up. The USDA Weekly Export Report is expected to shed light on export demand.

Market analysts noted that CBOT grain futures are trending lower, with limited buying interest from both fundamental and speculative players. Chicago Board of Trade (CBOT) soybean futures also retreated amid concerns over weak US export demand.

Currently, ICE cotton for December 2025 is trading at 66.17 cents per pound (unchanged), cash cotton at 64.17 cents (down 0.47 cent), the October 2025 contract at 64.04 cents (down 0.49 cent), the March 2026 contract at 68.13 cents (up 0.02 cent), the May 2026 contract at 69.49 cents (up 0.01 cent) and the July 2026 contract at 70.49 cents (down 0.04 cent). A few contracts remained at their previous closing levels, with no trading recorded today.