Insights

• ICE cotton futures rebounded sharply on Friday, supported by rising stock markets, stronger soybean prices, and optimism over potential trade agreements easing tensions.
• The July 2025 contract rose by 2.75 cents to 68.41 cents per pound but ended the week down 0.6 per cent.
• USDA data showed 21 per cent of US cotton-growing areas remain drought-affected, unchanged from the previous week.

ICE cotton futures rebounded and rose sharply on Friday, buoyed by optimistic prospects of trade agreements that could ease trade tensions. Rising stock markets and higher soybean prices also supported US cotton futures. Despite the sharp rise, US cotton futures ended the week with losses.

The ICE cotton July 2025 contract settled at 68.41 cents per pound (0.453 kg), up 2.75 cents (4.2 per cent) from the previous day. However, the contract posted a 0.6 per cent loss on a weekly basis.

The recovery in cotton prices was driven by expectations of a potential trade agreement. Rising stock markets and stronger soybean prices also contributed to the improvement in cotton futures.

Market analysts said the rally in stock markets and strength in soybeans helped support cotton prices. On the same day, US stock markets closed higher, recording their second consecutive weekly gain. The gains were driven by solid economic data and renewed hopes of easing trade tensions.

In terms of weather conditions, the US Department of Agriculture's (USDA) Office of the Chief Economist (OCE) released an agricultural drought report based on the US Drought Monitor map issued on Thursday. The USDA report showed that as of the week of April 29, about 21 per cent of US cotton-producing areas were affected by drought. This figure remained unchanged from the previous week.

ICE cotton for July 2025 settled at 68.41 cents per pound (up 2.75 cents). Cash cotton settled at 66.66 cents (up 2.75 cents), the May 2025 contract at 70.18 cents (up 4.57 cents), the October 2025 contract at 69.91 cents (up 2.59 cents), the December 2025 contract at 69.71 cents (up 2.28 cents), and the March 2026 contract at 70.85 cents per pound (up 2.20 cents).