ICE cotton futures rose and closed higher on Wednesday, supported by rising grain prices and stronger crude oil. Costlier crude oil makes polyester fibre more expensive, thereby boosting demand for natural fibre cotton. However, trading activity remained limited due to ongoing uncertainty surrounding trade, particularly as the 90-day tariff pause is set to end on July 9.
ICE’s most active December 2025 contract settled at 68.63 cents per pound (0.453 kg), up 0.60 cent. Other nearby contracts posted gains ranging from 47 to 59 points.
NYMEX crude oil rose over 3 per cent following geopolitical tensions linked to Iran’s suspension of cooperation with the IAEA and the announcement of a new US-Vietnam trade deal.
The rise in crude prices has made polyester—a key substitute for cotton—more expensive, thereby enhancing cotton’s relative competitiveness.
Trading volume on July 2 stood at 25,879 contracts, the lowest since December 31 (18,138 contracts). The previous day’s cleared volume was 37,864 contracts, reflecting reduced market participation. The decline in activity is attributed to the US holiday week, which dampened overall market momentum.
Uncertainty around the impending expiry of the 90-day tariff pause also discouraged active trading.
Vietnam is expected to remove tariffs on US goods, while the US plans to impose 20 per cent tariffs on Vietnamese products.
Market analysts noted that higher CBOT grain prices and a weaker dollar provided bullish cues for cotton.
Weather conditions are favourable in Texas but unfavourable in the Delta region, with the net impact on the crop remaining uncertain.
Demand has been modest—acceptable but not strong—with expectations for higher global consumption in the coming year.
The USDA’s report dated June 30 estimates US cotton planting for 2025 at 10.1 million acres, exceeding analysts’ expectations of 9.74 million acres. ICE deliverable inventory declined slightly to 40,488 bales as of July 1, from 40,683 bales the previous day.
Currently, ICE cotton for December 2025 is trading at 68.77 cents per pound (up 0.14 cent), cash cotton at 66.92 cents (up 0.49 cent), the July 2025 contract at 66.77 cents (up 0.49 cent), the October 2025 contract at 68.26 cents (up 0.09 cent), the March 2026 contract at 69.98 cents per pound (up 0.08 cent), and the May 2026 contract at 70.97 cents (up 0.04 cent). A few contracts remained at their previous closing levels, with no trading recorded today.
