ICE cotton futures closed lower yesterday after high volatility. The market rallied before witnessing a decline trend as it found support from rising crude oil which made polyester, a manmade substitute of cotton, costlier. However, US cotton failed to sustain gains due to profit booking at higher levels.

The most traded May 2026 contract settled at 71.31 cents per pound, down 0.36 cent or 0.50 per cent. The contract had touched an intraday high of 72.15 cents per pound. It also touched a low level of 70.90 cents per pound. During the session, the contract touched its highest level since May 6, 2025. This showed strong bullish momentum in early trade but also highlighted resistance near the 72-cent zone.

ICE cotton futures declined after profit booking at higher levels, with the May 2026 contract settling at 71.31 cents per pound.
Early gains, driven by rising crude oil and weather concerns, were capped by higher certified stocks and resistance near 72 cents.
Despite short-term pressure, the market remains fundamentally supported by supply risks and input cost concerns.

The early upside in the market was mainly supported by rising crude oil prices (WTI up around 0.5 per cent), which increased polyester production costs, making cotton relatively cheaper and more attractive, thereby improving cotton’s demand outlook through substitution effect.

Continued dry weather conditions across the US western and southwestern Great Plains are becoming a major concern for the upcoming crop, as soil moisture remains low and weather risk premium is gradually being built into prices.

According to market analysts, high input costs including fuel, fertilisers, and labour, are influencing farmers’ planting decisions, which could potentially limit acreage expansion or affect crop investment levels, thereby supporting prices in the medium term.

As per USDA Crop Progress Report (week ending April 5), cotton planting reached 5 per cent compared to 4 per cent last year and equal to the 5-year average, indicating a normal start to the season, although future progress will heavily depend on weather conditions.

Brazil’s export data (Secex) showed that March cotton exports reached 347,822.83 tons compared to around 239,000 tons last year, registering a sharp 45 per cent year-on-year increase, reflecting strong export momentum and ample global supply availability.

ICE certified cotton stocks increased significantly to 128,213 bales from 113,241 bales in the previous session (an increase of 14,972 bales), which added short-term pressure on prices as higher deliverable stocks signal improved immediate supply.

In the broader commodity complex, CBOT May soybeans declined by 0.73 per cent and soybean oil fell by 0.33 per cent, with soybean oil earlier touching a contract high of 70.49 cents/lb before correcting, indicating weakness in the vegetable oil segment.

US equity markets closed mixed as investors remained cautious amid ongoing geopolitical developments and uncertainty surrounding global trade and energy routes.

The cotton market remains fundamentally bullish with strong support from weather concerns and energy linkage, but short-term consolidation is likely as higher stocks and resistance near 72 cents continue to cap upside momentum.

This morning (Indian Standard Time), ICE cotton for May 2026 traded at 71.00 cents per pound (down 0.31 cent), cash cotton at 69.31 cents (down 0.36 cents), the July 2026 contract at 73.20 cents (down 0.34 cent), the October 2026 contract at 75.07 cents (down 0.55 cent), the December 2026 at 75.05 cents (down 0.42 cent) and the March 2027 contract at 75.94 cents (down 0.39 cent)). A few contracts remained at their previous closing levels, with no trading recorded so far today.

Fibre2Fashion News Desk (KUL)