The most active December 2026 contract settled at 82.46 cents down 0.11 cent. The contract had recorded a high level of 82.60 cents per pounds in the previous week. Cotton speculators have reduced their net long positions by around 2,000 contracts.
ICE cotton futures edged lower as profit-booking followed a strong rally that had lifted prices to a two-month high.
Weaker crude oil prices also weighed on sentiment.
However, tightening ICE certified stocks, hot and dry weather in the US, below-average monsoon forecasts in India, and expected lower output in Brazil continued to underpin the market, keeping the broader trend bullish.
Market analysts said that the recent weakness was mainly the result of profit-taking rather than a change in market fundamentals, noting that hot and dry weather in West Texas continues to provide underlying support.
Crude oil prices fell another 5 per cent, reaching a three-month low, as optimism grew over easing Middle East tensions and potential improvements in oil supply. Lower energy prices reduce polyester production costs, making synthetic fibres more competitive with cotton.
CBOT wheat futures also eased after the previous session’s sharp rally, as traders assessed the impact of Black Sea tensions on global grain exports.
Despite the weaker close, downside remained limited because weather-related production concerns continue to support the market. Weather remains the biggest bullish factor, with hot and dry conditions across West Texas continuing to threaten yield potential during the critical boll development stage.
In India, forecasts call for below-average monsoon rainfall through August, raising concerns about crop development and potential yield losses in key cotton-growing regions.
In Brazil, cotton production is projected to decline by 1.5 per cent in 2027 despite a 4.4 per cent increase in planted area, as El Niño-induced dry weather is expected to intensify through September and reduce crop yields.
ICE Certified Stocks declined further to 86,371 bales from 87,606 bales, reinforcing the tightening supply of nearby deliverable cotton. Technically, December futures remained close to their recent highs despite the minor pullback, suggesting the market is undergoing a healthy consolidation following a strong three-session rally rather than signalling a trend reversal.
Immediate support is seen at 82.00 cents, followed by 80.88 cents, while resistance remains at 82.96 cents. A sustained move above this level could pave the way for further upside.
Overall, cotton witnessed a modest pullback as traders booked profits and weaker crude oil prices weighed on broader commodity markets. However, tightening ICE certified stocks, deteriorating US crop conditions, persistent weather risks across the US, India and Brazil, and ongoing supply concerns continue to provide strong underlying support, keeping the broader market trend bullish.
This morning (Indian Standard Time), ICE cotton for December 2026 was traded at 82.60 cents per pound (up 0.14 cent), cash cotton at 77.38 cents (down 0.22 cent), the October 2026 at 81.13 cents (down 0.22 cent), the March 2027 contract at 84.13 cents (up 0.08 cent), the May 2027 contract at 85.25 cents (up 0.06 cent), and the July 2027 contract at 84.87 cents (up 0.01 cent). A few contracts remained at their previous closing levels, with no trading recorded so far today.
Fibre2Fashion News Desk (KUL)
