ICE cotton futures closed slightly lower yesterday as the market continued to look for clear demand signals amid ongoing global economic and geopolitical uncertainties. However, gains in grains provided some support and helped limit losses. Global stock markets eased concerns after President Donald Trump’s announcement to withdraw planned tariffs against Europe and a NATO-related agreement on the Greenland issue.

The most actively traded March cotton contract eased 0.04 cents to settle at 64.30 cents per pound, marking its second-lowest close since January 2, 2026. Cotton futures remained locked in a narrow range throughout the session, with prices finishing from 7 points lower to 9 points higher.

ICE cotton futures edged lower as the market searched for clearer demand signals amid global economic and geopolitical uncertainty.
Limited losses were cushioned by strength in grain markets and a rebound in global equities after tariff concerns eased.
Trading volumes and open interest stayed robust, signalling persistent participation despite narrow price movement.

Despite minimal price movement, turnover remained solid. Trading volume totalled 40,577 contracts, compared with 56,942 contracts cleared in the previous session. Open interest reached its sixth consecutive all-time high, rising by 2,128 contracts to 338,853. Over the past 14 sessions, open interest has increased every day, adding a cumulative 39,281 contracts, highlighting unusually persistent participation despite stagnant prices.

Broader markets rebounded after President Donald Trump announced a framework for a NATO-related agreement involving Greenland and withdrew planned February 1 tariffs on European nations. The announcement eased concerns over a potential US–Europe trade conflict that had fuelled sharp losses a day earlier.

All three major US equity indices recovered between half and two-thirds of their prior session losses. Gold posted new all-time highs on both an intraday and closing basis. The US dollar index ended higher but recovered less than 20 per cent of the previous day’s decline.

Market analysts said participants were largely watching how developments unfold. The market has adjusted slightly, but there has been no strong reaction.

US stocks rebounded modestly after their worst sell-off in three months as investors assessed President Donald Trump’s remarks at the Davos Forum.

Rising grain markets provided indirect support. CBOT soybean futures closed higher due to slow early progress in the South American soybean harvest, as market focus shifted away from geopolitical tensions.

Analysts said demand expectations remain cautious, although demand may improve slightly this year. Many are hoping the Buy American Cotton Act could have some impact. It may offer a small glimmer of hope, but for now, conditions remain relatively calm. The Buy American Cotton Act is a proposed US measure designed to support domestic cotton consumption by offering transferable federal tax credits to companies using US-produced cotton.

According to Intercontinental Exchange data, deliverable No. 2 cotton futures inventory fell to 10,422 tons as of January 20, down from 11,029 bales in the prior session.

This morning (Indian Standard Time), ICE cotton for March 2026 was settled at 64.25 cents per pound (down 0.05 cent), cash cotton at 62.05 cents (down 0.04 cent), the May 2026 contract at 65.85 cents (down 0.07 cent), the July 2026 contract at 67.34 cents (down 0.06 cent), the October 2026 contract at 68.33 cents (up 0.07 cent) and the December 2026 contract at 69.07 cents per pound (down 0.09 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.

Fibre2Fashion News Desk (KUL)