ICE cotton gains further on short covering amid trade deal prospects
ICE cotton futures continued to rise on Friday as easing trade tensions lifted market sentiment. Former President Trump's announcement of prospective trade deals with multiple countries encouraged speculators to cover their short positions. ICE cotton posted gains throughout the week, with only a few contracts dipping slightly on Monday.
The most active December 2025 contract on ICE settled at 69.32 cents per pound (0.453 kg), up 0.52 cent. The contract reached an intraday high of 69.52 cents, the highest level since April 25, marking a two-month high. It gained a total of 262 points, or 3.9 per cent, over the six sessions during the week. Other contracts gained between 18 and 66 points on Friday. On a weekly basis, cotton contracts posted gains ranging from 167 to 348 points.
ICE cotton futures extended gains as easing US-China trade tensions and short covering lifted sentiment. December 2025 contract hit a two-month high at 69.32 cents/lb. Strong weekly gains, lower deliverable stocks, and a weaker US dollar supported the rally. China's confirmation of the trade framework with the US further boosted market optimism.
Except for a slight dip on Monday in the expiring July and nearby October contracts, all cotton contracts ended higher each day this week.
Trading volume stood at 35,926 contracts, while the cleared volume for June 26 was 39,350 contracts. The average daily trading volume for the week was calculated at 40,958 contracts, indicating robust activity and interest in cotton futures.
According to ICE data, deliverable stock under the No. 2 cotton futures contract was 51,495 bales as of June 26, significantly down from 61,136 bales on the previous trading day, suggesting a tightening supply situation.
Market analysts said the US' announcement of its intent to reach trade agreements with multiple countries prompted speculators to cover short positions, contributing to the price rally.
A weakening US dollar during the session also supported cotton prices, as commodities priced in dollars become more affordable to international buyers when the greenback declines.
A spokesperson from China's Ministry of Commerce confirmed that China and the United States had finalised details under the China–US London Framework. As part of the agreement, China will review and approve export applications for controlled items according to its laws, and the US will cancel several restrictive measures against China—potentially boosting trade sentiment and cotton demand.
The easing of trade tensions between the US and China, one of the world's largest cotton consumers, is viewed as a positive fundamental factor for the global cotton market, further supporting this week's rally.
ICE cotton for December 2025 settled at 69.32 cents per pound (up 0.52 cent). Cash cotton was settled at 67.55 cents (up 0.66 cent), the July 2025 contract at 67.52 cents (up 0.45 cent), the October 2025 contract at 68.80 cents (up 0.66 cent), the March 2026 contract at 70.60 cents per pound (up 0.48 cent), and the May 2026 contract at 71.59 cents (up 0.43 cent).
Fibre2Fashion News Desk (KUL)
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