Cotton Futures Plummet on Strong Dollar and Profit-Taking
Cotton futures declined on September 2 due to speculative long liquidation and technical profit-taking. The market had been experiencing an extended multi-week rally, pushing contracts to multi-month highs.
After absorbing significant bullish momentum in late August, market participants began to trim their net-long exposure at the start of the new trading month. This move was exacerbated by a strengthening US dollar index, which heightened currency headwinds for dollar-denominated soft commodities and reduced investor appetite across agricultural markets.
The decline was also influenced by recent crop condition data indicating a stabilization in crop quality, tempering immediate supply-disruption fears. However, persistent dryness in key growing zones remains a structural concern.