Cotton Futures Slide to Near Three-Week Low Amid Weak Oil Prices and Market Sentiment

Mumbai, 9 Oct (Commoditiescontrol): ICE cotton futures declined over 2% on Tuesday, hitting a near three-week low as slumping oil prices and broader market pessimism weighed on the commodity.

The December cotton contract dropped by 126 points, closing at 72.27 cents per pound. March and May contracts followed suit, settling at 74.42 and 75.75 cents per pound, respectively.

Weaker outside markets contributed to the pressure on cotton prices, with crude oil falling by $3.24 per barrel and the U.S. dollar index edging lower. August cotton export shipments reached a decade-low, totaling 684,962 bales. This marked a 34.07% decline compared to last year and an 11.49% drop from July's figures.

In its weekly Crop Progress report, the U.S. Department of Agriculture (USDA) revealed that 26% of the U.S. cotton crop had been harvested, surpassing the 22% average. Harvesting progress varied by region, with Georgia slightly lagging, while Texas was ahead by 4 percentage points. Cotton condition ratings slipped 2% to 29% rated as good/excellent, with poor/very poor conditions also down by 2%, raising the Brugler500 index by 2 points to 283.

Online sales reported by The Seam on October 7 totaled 2,100 bales, averaging 68.30 cents per pound. ICE cotton stocks remained unchanged at 265 bales of certified stocks. On the same day, the Cotlook A Index increased by 50 points to 84.85 cents per pound. Meanwhile, the USDA Adjusted World Price (AWP) was lowered by 25 points to 60.81 cents per pound, valid through Thursday.

Geopolitical tensions also influenced market sentiment, with Brent crude futures rising $0.83 per barrel as traders braced for Israel’s reaction to a missile strike from Iran. Higher oil prices often support cotton futures, which benefit from stronger global demand dynamics.

In India, the cotton crop outlook appears optimistic, with improved yields expected despite higher-than-normal temperatures in northern regions, which have led to some plant wilting. Northern India is still projected to produce around 4 million bales, surpassing last year’s output.

Market participants are closely watching support levels for the December cotton contract, with key levels at 71.06 and 69.84 cents per pound, and resistance anticipated at 73.54 and 74.80 cents per pound.

(By Commoditiescontrol Bureau: 09820130172)