Market Observation: Last Week, The Cotton Of ICE Period Was Partially Recovered With The Help Of Replenishment

As of March 7 (Friday), the cotton futures of the Intercontinental Exchange (ICE) had risen by more than 1% on a weekly basis. Speculators made short covering due to the improvement of cotton demand, and the decline of the US dollar also boosted the market.

Earlier in the week, cotton prices fell below the trading range of the previous six months, but rebounded successfully, rising above 66.07 cents at the end of the week.

The cotton market experienced a turbulent week, and the price fell to a new contract low of 62.54 cents/pound. The tariffs imposed by the United States on the three major trading partners took effect on Tuesday, causing cotton futures to fall to the lowest level since 2020. As speculators held record short positions, some short covering helped the market partially recover its losses at the beginning of the week.

The trading volume this week was very large, and the sharp decline on Tuesday pushed the trading volume of cotton futures to the second highest level in history. Positions increased by 9176 to 282197. According to the data released by the Intercontinental Exchange (ICE), the inventory of No. 2 cotton delivery contracts that can be delivered by ICE has increased to 14488 bales as of March 6, compared with 14433 bales the previous day.

Worries about tariffs and economic tensions have seriously dragged down the stock market, wiping out all gains in 2025.

The decline in crude oil prices was mainly due to concerns about tariffs, but also because OPEC announced plans to increase production in April, which is the first increase since 2022.

The European Central Bank (ECB) recently lowered interest rates because of the improvement of economic conditions and the persistence of tariff threats.

Under the pressure of geopolitical uncertainty and trade tensions, the US dollar fell sharply this week. Although the weakening of the US dollar usually benefits commodities, other factors mask the decline of the US dollar. Other currencies, especially the euro, strengthened after the European Central Bank cut interest rates.

The weekly export sales report released by the United States Department of Agriculture (USDA) shows that the export sales of American cotton are higher than the average level, and weekly shipments are strong.

In the week ended February 27, the net export sales of American cotton in the current year increased by 241500 bales, 45% more than the previous week, and 6% more than the average of the previous four weeks. Next year, the net export sales of American cotton increased by 105600 bales. 334000 bales of American cotton were shipped for export, an increase of 25% over the previous week and 28% over the average of the previous four weeks, including 23100 bales for export to China.

Next week, the US Department of Agriculture will release the latest monthly supply and demand report in the early morning of March 12 (Wednesday) Beijing time. The consumer price index (CPI) and producer price index (PPI) of the United States will also be released to provide an update on inflation.