ICE cotton further falls on stronger dollar, weak export demand

ICE cotton futures continued their downward trend yesterday, pressured by a stronger US dollar and weak export demand. The rising dollar discouraged buying of agricultural commodities, including cotton. However, a mild gain in crude oil helped limit losses in cotton prices.

ICE’s most active December 2025 contract settled at 67.42 cents per pound (0.453 kg), down 0.18 cent.

The US dollar index rose for the third consecutive day to 98.511, gaining 0.431. Dollar strength was driven by expectations that the Federal Reserve will keep rates higher for longer. A stronger dollar makes US commodities more expensive for overseas buyers, dampening demand.

ICE cotton futures extended losses on August 21, 2025, as a stronger US dollar and weak export demand weighed on prices, with mild crude oil gains capping declines.
USDA weekly sales fell to 105,400 bales, while shipments dropped sharply.
Analysts warned prices remain under pressure despite USDA trimming 2025-26 output to 13.2 million bales, still above last season.

Crude oil prices edged higher as US inventory data showed sharp declines in crude and gasoline stocks, though a weak demand outlook and concerns over the Chinese economy capped further gains.

USDA weekly export sales reported net sales of 105,400 bales for 2025-26, down from 123,300 bales the previous week. Actual shipments stood at 138,800 bales, compared with 246,900 bales a week earlier.

A market analyst noted that cotton prices have already been falling for seven to eight months. Without stronger export demand, prices are likely to remain under pressure.

USDA’s August WASDE projected 2025-26 US cotton production at 13.2 million bales, down from 14.0 million in July, but still above 2024-25’s 12.05 million bales.

In external markets, US corn and soybeans gained as export sales exceeded expectations, while wheat fell around 1.5 per cent on forecasts of improved Black Sea region harvests.

Currently, ICE cotton for December 2025 is trading at 67.41 cents per pound (down 0.01 cent), cash cotton at 64.64 cents (down 0.75 cent), the October 2025 contract at 65.80 cents (down 0.09 cent), the March 2026 contract at 69.06 cents (down 0.04 cent), the May 2026 contract at 70.34 cents (down 0.05 cent), and the July 2026 contract at 71.01 cents (down 0.11 cent). A few contracts remained unchanged at previous closing levels, with no trading recorded today.

Fibre2Fashion News Desk (KUL)