ICE Cotton Sees Dramatic Drop In the midst of market volatility
15-Month Low for ICE Cotton prices plunged to a fifteen-month nadir on Wednesday, influenced by declining crude oil prices and the persistent high Federal Reserve interest rates amidst heightened inflation.
Price Details The July US cotton contract saw a significant reduction, closing at 76.51 cents per pound, before further dropping to 76.05 cents. From the start of April, this contract has descended by 1,680 points from 93.31 cents. Similarly, the December contract settled at 75.17 cents, down by 918 points over the last month.
Impact of Crude Oil and Dollar Index Crude oil's nearly 3% drop due to increased supply and a calmer Middle East significantly impacted cotton prices. The US dollar index, despite its strength, slightly eased after Federal Reserve remarks, offering some support to cotton prices.
Market Dynamics trading activity was robust with 56,592 contracts on Wednesday. Open interest for July increased, indicating a rise in speculative short positions.
Stock Movements the ICE Cotton exchange began with certified stocks at 183,114 bales, experiencing movements in certifications and awaiting further review of 1,700 bales.
Market Outlook the current lower cotton prices benefit mills, yet the volatility makes strategic purchasing challenging. Continued low prices could lead to financial strains for US growers and potentially affect future sowing decisions.
Recent Trading Session Updates During Thursday's session, there was a mixed response in cotton prices. The July 2024 contract rose by 0.61 cent to 77.12 cents per pound, while other contracts saw varied adjustments.
