ICE cotton futures declined further on Tuesday due to a higher-than-expected US cotton planting area. However, gains in crude oil and wheat, along with a weaker dollar, offset losses and capped the downward trend. Stronger crude oil and a weaker US dollar make cotton more attractive for buying.
ICE’s most active December 2025 contract settled at 68.03 cents per pound (0.453 kg), down 0.10 cent. Various contracts exhibited a mixed trend—the December 2025 contract settled lower, while other contracts ranged from 15 points lower to 4 points higher.
The US dollar traded near multi-year lows, having recorded its worst first-half performance since the 1970s, making dollar-denominated cotton cheaper for international buyers. A weaker dollar improves the competitiveness of US cotton in the global export market, acting as a supportive factor for futures prices.
Trading volume on July 1 stood at 37,864 contracts, while cleared volume on June 30 was 47,389 contracts. According to ICE data, certified No. 2 cotton stocks as of June 30 totalled 40,683 bales, down from 45,110 bales on the previous trading day.
The USDA planting intention report showed that the expected US cotton planting area for 2025 is 10.12 million acres, compared to market expectations of 9.735 million acres and the actual planted area of 11.183 million acres in 2024. The higher-than-expected acreage figure generated mild bearish sentiment and was the primary reason for Monday’s sharp sell-off in cotton futures.
Analysts believe that Tuesday’s modest recovery was driven by market participants reassessing Monday’s steep decline, which many considered an overreaction.
Crude oil prices rose on July 1 due to optimistic demand signals and caution among investors ahead of the August OPEC+ production policy meeting. Rising oil prices increase the cost of polyester—a substitute for cotton—thereby indirectly supporting demand for natural fibre cotton.
Wheat markets also displayed strength, providing positive spillover sentiment to the cotton complex.
As of now, ICE cotton for December 2025 is trading at 68.21 cents per pound (up 0.18 cent). Cash cotton settled at 66.43 cents (unchanged), the July 2025 contract at 68.28 cents (unchanged), and the October 2025 contract at 67.68 cents (unchanged). The March 2026 contract is trading at 69.50 cents per pound (up 0.19 cent), and the May 2026 contract at 70.54 cents (up 0.18 cent). A few contracts remained at their previous closing levels, with no trading recorded today.
