Cotton futures on the Intercontinental Exchange retreated slightly after reaching a one-week high, as investors reacted to volatile energy prices and rising geopolitical tensions in the Middle East.
The most actively traded May 2026 cotton contract settled at 65.17 cents per pound, down 0.13 cent, after earlier touching an intraday high of 65.78 cents, the strongest level since late February. Market activity remained moderate, with trading volume reaching about 57,080 contracts, while open interest increased by 3,545 contracts to 329,892, signaling fresh participation from traders.
Certified cotton stocks held by the exchange declined to 121,453 bales, compared with 121,986 bales reported a day earlier, indicating a slight tightening in available deliverable supply.
Market sentiment has been strongly influenced by developments in global energy markets. Crude oil prices surged nearly 4.6% amid escalating tensions involving the United States, Israel, and Iran, particularly following attacks on commercial vessels near the Strait of Hormuz, a key global oil shipping route. Higher oil prices typically increase the production cost of polyester and other synthetic fibers, which are major substitutes for cotton, thereby offering potential support to cotton demand.
However, volatility in global financial markets has limited further gains. The US Dollar Index strengthened by about 0.4%, making dollar-denominated commodities such as cotton more expensive for international buyers. Meanwhile, precious metals including gold and silver slipped as investors adjusted positions amid uncertainty.
Fundamental supply and demand factors also weighed on the market. The latest World Agricultural Supply and Demand Estimates (WASDE) released by the United States Department of Agriculture raised global cotton production for the 2025–26 season by 1.1 million bales, while slightly reducing projected global consumption by 140,000 bales. These revisions suggest a more comfortable supply outlook despite current market volatility.
Technically, the May cotton contract continues to trade above its 10-day, 20-day, 40-day and 50-day moving averages for the second consecutive session, indicating underlying market strength. Traders are also watching the upcoming first notice day on April 24, which marks the beginning of the delivery period for the May contract.
