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ICE Cotton Futures Rise as U.S. Export Demand Strengthens, Dollar Weakens

25 Jan 2025 10:49 am
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Mumbai, 25 Jan (Commoditiescontrol): Cotton futures on the Intercontinental Exchange (ICE) climbed to a two-week high on Friday, buoyed by a weaker dollar and a strong U.S. federal export sales report that highlighted improved demand for cotton. The benchmark March cotton contract gained 0.14 cents, settling at 67.61 cents per pound. May and July contracts also rose, closing at 68.67 cents and 69.77 cents per pound, respectively. The March contract reached its highest point since January 10, finishing slightly up for the week.

The U.S. Department of Agriculture’s (USDA) weekly export sales report showed upland cotton net sales at a marketing year high of 348,900 running bales (RB), a 10% increase from the previous week and 62% above the four-week average. However, export shipments dipped slightly by 1% to 222,600 RB, though still 32% higher than the prior four-week average.

Geopolitical concerns lingered as U.S. President Donald Trump indicated the possibility of imposing 10% tariffs on Chinese goods starting February 1. Meanwhile, in the United Kingdom, questions arose about the use of Xinjiang-sourced cotton in products sold by fast-fashion retailer Shein, as British lawmakers demanded clarity.

Global cotton production rose by 2 million bales to 119.45 million, driven by higher output in China. This increase pushed global ending stocks to 77.91 million bales, raising concerns about potential oversupply. U.S. export forecasts were reduced by 300,000 bales to 11 million due to strong competition from Brazil, Australia, and India.

Market activity saw ICE-certified cotton stocks remain steady at 218 bales, while the USDA’s Adjusted World Price (AWP) fell by 27 points to 53.71 cents per pound. Analysts project cotton prices to trade between 65 and 69 cents per pound in the short term, with key support levels at 67.23 and 66.86 cents and resistance at 68.21 and 68.82 cents.

Looking ahead, traders will monitor U.S. trade policies, geopolitical developments, and the dollar's performance for further market direction.

(By Commoditiescontrol Bureau: 09820130172)


       
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