ICE cotton weakens on US dollar strength, improved rain hopes

The most-traded July 2026 contract settled at 82.33 cents, down 1.37 cents, or 3.6 per cent. The December 2026 contract fell by 0.82 cent to settle at 83.16 cents per pound. Intraday trade remained volatile, with the market failing to extend the previous rally and facing steady selling pressure through most of the session.

ICE cotton weakened as a stronger US dollar, soft export enquiry, favourable US planting weather and rising certified stocks pressured sentiment.
July 2026 settled at 82.33 cents, down 3.6 per cent.
Planting reached 41 per cent, slightly above last year, while cautious mill buying, weak China textile demand and lower commodity markets kept the short-term tone bearish.

Total trading volume was 60,785 contracts, significantly below previous session’s 70,219 cleared contracts, reflecting reduced trader participation and cautious positioning ahead of the long weekend.

Cotton futures continued technical consolidation after the sharp upside rally seen last week, with traders booking profits at higher levels. US cotton cash market activity remained very slow as mills reduced fresh purchases due to high prices and uncertain downstream demand.

Merchants reported limited export inquiry while buyers remained cautious waiting for clearer market direction.

A stronger US Dollar Index climbed to new highs against the euro, making US cotton more expensive for foreign buyers and creating additional pressure on commodity markets.

Broader commodity markets also remained weak as investors focused on US tariff concerns, inflation uncertainty, and global economic slowdown fears. Crude oil and several agricultural commodities traded lower, negatively affecting overall speculative sentiment in cotton.

Weather across major US cotton growing regions remained mostly favourable for planting and early crop development. Forecasts showed chances of rainfall in Southwest Texas and nearby dry regions, reducing immediate weather risk premium in the market.

According to the United States Department of Agriculture (USDA) Crop Progress Report released Monday, US cotton planting reached 41 per cent as of May 17, 2026. Previous week planting pace was 29 per cent, last year same time planting was 38 per cent and last year five-year average planting pace stands at 40 per cent. Fast planting progress added mild bearish pressure as crop development remains broadly on schedule.

Vaisala Weather analysis indicated favourable soil moisture across the Delta and Southeast cotton belt supporting crop emergence. However, portions of West Texas and Southwest US regions continue to experience dry soil conditions despite expected rainfall.

ICE certified cotton stocks increased sharply to 203,491 bales on May 18, compared to 193,438 bales previous day, indicating improved deliverable supply availability. Increased certified stocks were viewed as mildly negative for nearby cotton futures.

China market sentiment remained cautious amid weak textile demand and slow yarn movement, limiting aggressive buying support for global cotton prices. Egypt announced a nationwide initiative to support textile manufacturing, spinning mills, weaving units, and cotton-related small industries to strengthen exports and improve cotton sector utilisation.

Market participants remained highly cautious ahead of the upcoming 3-day US holiday weekend which is expected to reduce liquidity and trading activity further.

Technical traders noted that July futures continue to hold above key psychological support near 80 cents per pound, though upside momentum has slowed considerably.

Overall market tone remained cautious to slightly bearish in the short term, with next directional movement likely dependent on export sales, US weather developments, outside financial markets, dollar movement, and mill buying activity.

This morning (Indian Standard Time), ICE cotton for July 2026 was traded at 81.84 cents per pound (down 0.49 cent), cash cotton at 79.33 cents (down 1.37 cent), the October 2026 contract at 82.09 cents (down 0.80 cent), the December 2026 at 82.84 cents (down 0.32 cent), the March 2027 contract at 83.58 cents (down 0.32 cent) and the May 2027 contract at 83.96 cents (down 0.37 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.

Fibre2Fashion News Desk (KUL)