Cotton futures on the Intercontinental Exchange (ICE) declined amid broader weakness across agricultural commodities and a strengthening US dollar, which made American cotton more expensive for overseas buyers.
The most actively traded May contract on Intercontinental Exchange fell by 0.49 cent to settle at 63.64 cents per pound, after touching its lowest level since February 9 during the session. Market participants attributed the decline to negative external factors weighing on commodity markets and cautious demand sentiment.
The US dollar edged higher against major currencies, supported by geopolitical uncertainty surrounding US-Iran nuclear talks. A firmer dollar typically dampens export competitiveness, as cotton priced in dollars becomes costlier for international buyers.
Analysts noted that the overall tone across agricultural markets remains weak. In grains, Chicago wheat and soybean futures extended losses for a second consecutive session from recent multi-month highs. Ample global wheat supplies and subdued soybean demand during the Chinese New Year holiday further pressured prices.
Traders are now awaiting the US Department of Agriculture’s (USDA) weekly export sales report, scheduled for release on Friday following a delay due to the Presidents’ Day holiday. Market observers suggest cotton is likely to remain range-bound unless there is a clear improvement in global demand fundamentals.
Cotton markets tend to perform better during periods of economic stability. However, ongoing macroeconomic uncertainty and volatile currency movements have limited buying interest.
According to the latest data from the US Commodity Futures Trading Commission (CFTC), speculators increased their net short positions by 8,194 contracts to 71,777 contracts for the week ending February 10, reflecting bearish market sentiment.
