ICE cotton slips as tariff tensions weigh on demand

Fibre2Fashion

22-07-2025

ICE cotton futures weakened on Monday as the bearish trend in the grain market spilled over into US cotton. Trade tensions amid US tariffs also dampened demand for US cotton. Slow export sales during the week ending July 10 further indicated softened market sentiment. Although the US dollar weakened against other currencies, it failed to support cotton prices.
ICE's most active December 2025 contract settled at 68.10 cents per pound (0.453 kg), down 0.58 cent. The contract touched an intraday low of 67.92 cents, the lowest level since July 15. This marked the second consecutive day of losses, with a cumulative two-session decline of 70 points for the December contract. Other cotton contracts closed lower by 47-58 points. Losses over the two sessions ranged from 51 to 71 points.
ICE cotton futures fell on July 21 as bearish trends in CBOT grains and USâ€'Indonesia tariff tensions weighed on sentiment. December 2025 cotton settled at 68.10 cents/lb, hitting a new weekly low. Despite a weaker US dollar, poor demand and a 93 per cent drop in net export sales curbed support. The USDA rated 57 per cent of the cotton crop as good-to-excellent, up from 54 per cent last week.
The trading session was described as 'lifeless', reflecting subdued activity and bearish sentiment across the board. Although the US dollar weakened—making dollar-priced cotton cheaper for overseas buyers—the impact was limited due to already sluggish demand.
Total trading volume on July 21 was 31,928 contracts, slightly above the previous session's cleared volume of 30,857 contracts. The average daily trading volume last week stood at 28,718 contracts, indicating a moderate rise in participation this session.
According to market analysts, the downward momentum in CBOT grain markets is spilling over into the cotton market, applying additional pressure. CBOT corn and soybean futures dropped as key US grain and cotton belts are forecast to receive crop-friendly rainfall, weakening sentiment for agricultural commodities.
President Donald Trump announced via social media a 19 per cent tariff on all imported Indonesian goods, while US exports to Indonesia will receive tariff-free and non-tariff barrier treatment. Rising global trade tensions have further dampened the outlook for cotton demand, contributing to the bearish tone in the futures market.
The USDA Export Sales Report for the week ending July 10 also showed a 35 per cent drop in US cotton export shipments, totalling 156,400 bales from the prior week. Net export sales were only 5,500 bales—a sharp 93 per cent decline from the previous week and 89 per cent below the four-week average.
The USDA Weekly Crop Progress Report for the week ending July 20 rated 57 per cent of the US cotton crop as good to excellent, up from 54 per cent last week and 53 per cent during the same period last year, indicating improving crop conditions.
Currently, ICE cotton for December 2025 is trading at 68.08 cents per pound (down 0.02 cent), cash cotton at 65.29 cents (down 0.58 cent), the October 2025 contract at 66.54 cents (down 0.54 cent), the March 2026 contract at 69.41 cents (down 0.05 cent), the May 2026 contract at 70.49 cents (down 0.03 cent), and the July 2026 contract at 71.31 cents (up 0.04 cent). A few contracts remained at their previous closing levels, with no trading recorded today.
Fibre2Fashion News Desk (KUL)