Fashion
ICE cotton hits 11-month high on weak dollar, drought fears
The most traded May 2026 contract settled at 73.26 cents per pound, up 1.59 cent or 2.22 per cent. The contract has broken the key 73-cent resistance level, showing strong buying interest. December 2026 contract settled at 76.87 cents per pound, with gains of 1.40 cent. Most active contracts across the board gained between 80 and 174 points.
ICE cotton surged to an 11-month high, breaking the 73-cent level, driven by a weaker US dollar and drought concerns in key growing regions.
Strong trading volumes and speculative interest reinforced bullish sentiment.
Despite bearish USDA data, weather risks and rising crude oil prices supported cotton as a preferred fibre in the near term.
Market movement defied earlier “oversold” expectations, showing strong reversal and aggressive buying activity.
Trading volume remained exceptionally high at 143,973 contracts during the session, ranking as the 5th highest volume ever recorded. Previous session volume was even higher at 156,255 contracts (3rd highest ever), confirming sustained heavy participation and strong speculative trade interest. In 2026 so far, trading volume has exceeded 120,000 contracts in 7 out of 12 sessions, highlighting consistently elevated market activity.
US dollar index declined to near a one-month low, making US cotton cheaper for overseas buyers and boosting export competitiveness.
Crude oil prices rose approximately 3 per cent due to concerns over continued restrictions in the Strait of Hormuz, increasing polyester production costs and indirectly supporting cotton demand as an alternative fibre.
Market analysts noted prices dipped overnight but rebounded due to weaker dollar and drought concerns, highlighting weather as a key driver.
USDA weekly export sales data showed net sales of 319,600 bales for the current marketing year for week ending April 2, down 14 per cent from previous week but up 25 per cent compared to the 4-week average. Export data initially pressured prices but overall market sentiment remained supported by supply concerns.
ICE certified deliverable stock of No. 2 cotton futures remained unchanged at 128,213 bales as of April 8, indicating no immediate tightness from stock movement.
USDA increased global cotton production forecast for 2025-26 by 900,000 bales while raising global consumption by 560,000 bales.
Analysts said that although demand is improving, supply is rising at a faster pace (bearish factor), but adverse US growing conditions are currently providing stronger support to prices. The market is currently reacting more to weather risks than to bearish fundamental data, indicating short-term sentiment dominance
In broader commodity markets, CBOT wheat, corn, and soybean futures rebounded from previous session lows and moved higher during the day. CBOT May soybean futures closed slightly higher, supported by gains in soybean meal and soybean oil along with cross-market strength.
Cotton market showed a strong bullish breakout above 73 cents backed by heavy volume, weak dollar, and weather concerns, with price action clearly overriding bearish USDA supply projections, indicating continued weather-driven strength in the near term.
This morning (Indian Standard Time), ICE cotton for May 2026 traded at 73.16 cents per pound (down 0.10 cent), cash cotton at 71.26 cents (up 1.59 cent), the July 2026 contract at 75.25 cents (down 0.07 cent), the October 2026 contract at 77.10 cents (up 0.15 cent), the December 2026 contract at 76.79 cents (down 0.08 cent) and the March 2027 contract at 77.54 cents (down 0.08 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)