Cotton Prices Rebound from Profit-Taking, Open Interest Continues to Rise

ICE cotton futures declined on Monday due to profit-taking and consolidation following an exceptional rally in the previous week. This marked the first broad-based decline since July 29, indicating a normal corrective session after the recent sharp price increase.

The stronger US dollar also put pressure on US cotton prices, which had benefited from a weaker dollar during the previous week's rally. The most active December 2026 contract settled at 83.86 cents, down 0.54 cent from Friday's close.

Despite the decline, open interest increased by 3,575 contracts to 343,058, marking the sixth consecutive daily increase. This suggests that fresh positions are continuing to enter the market even as prices decline, a bullish signal.

The USDA's August crop-condition data showed the US cotton crop deteriorating, with only 40% rated good and 10% excellent. However, this did not deter buyers, and China's State Reserve buying remains a major underlying demand factor, supporting nearby physical cotton prices.