ICE cotton futures weaken amid strong dollar and falling crude oil prices

ICE cotton futures weakened on Wednesday, influenced by a stronger US dollar and declining crude oil prices. The March 2025 contract settled at 68.23 cents per pound, down 0.28 cents, continuing a downward trend after shedding 57 points over the last two sessions.

The dollar's rise, bolstered by higher Treasury yields, made cotton more expensive for overseas buyers. Meanwhile, crude oil prices dropped over 1 per cent, driven by the stronger dollar and rising US fuel inventories, which pressured the polyester market, an alternative to cotton.

Traders also held back on significant purchases ahead of the USDA’s upcoming WASDE report, dampening market sentiment. The session saw a total trading volume of 35,598 contracts, the highest of the year so far. ICE data showed that deliverable stocks remained steady at 20,113 packages as of January 7. Market analysts anticipate cotton prices to fluctuate between 65 and 72 cents per pound in the near term, as demand remains sluggish.