ICE cotton futures fell on Wednesday following a three-week high, pressured by a stronger U.S. dollar and profit-taking. The May 2025 contract closed at 67.68 cents per pound, down 1.14 cents, after hitting 69.25 cents in the previous session, its highest level since January 2024.
Strong Dollar and Profit-Taking Weigh on Cotton Prices
Analysts pointed to the stronger dollar as a key factor behind the decline in cotton futures. A stronger dollar makes U.S. cotton more expensive for international buyers, reducing demand. In addition, the market experienced selling pressure after recent gains, with traders taking profits from the previous price surge.
Support for the cotton market was seen at 67-68 cents, while resistance remained at 70 cents. Traders are also awaiting further insights into demand with the USDA’s export sales report, which is expected on Friday, February 21.
Increased Cotton Stocks Contribute to Price Pressure
The decline in cotton prices is also linked to rising U.S. cotton stocks. As of February 18, ICE’s deliverable No. 2 cotton futures inventory stood at 1,732 bales, a significant increase from 218 bales on February 14. This rise in stocks, combined with broader financial market sentiment, contributed to the downward pressure on prices.
USDA Report and Market Outlook
Traders are closely watching the USDA’s weekly export sales report for additional clues about U.S. cotton demand. The last report showed an increase in U.S. cotton export shipments compared to the previous week and the four-week average.
The cotton market will continue to watch for further developments, especially in the context of the USDA’s upcoming report and ongoing dollar strength, which could influence future price movements.
Other Commodities
In related markets, the Chicago Board of Trade (CBOT) corn futures also closed lower on February 19, retreating from a 16-month high amid profit-taking.
Currently, ICE cotton futures for May 2025 are trading at 67.66 cents per pound, down 0.02 cents. Other contracts, including cash cotton, March 2024, and October 2025, have also experienced declines, with a few contracts remaining unchanged.
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