ICE cotton falls for seventh session on US output expectations

Cotton futures touched June 2012 lows on Wednesday as producers raced to hedge their crops as the market braced for an expected boost on Friday in the US government's outlook for 2014/15 supply prospects in the United States, the world's top exporter.
The benchmark December cotton contract on ICE Futures US slipped as low as 69.50 before closing down 0.43 cent, or 0.6 percent, at 69.67 cents a lb. The December contract, which represents the first of the 2014/15 crop, has closed down every session since the US Agriculture Department (USDA) last week pegged 2014 US plantings at 11.37 million acres, up 9 percent from last year.
That figure was more than many forecast and raised expectations that the USDA will boost its forecast for 2014/15 US output from a June projection of 15 million 480-lb bales and keep the pressure on prices that are already down 5 percent so far this month. "We're seeing some panicking by producers to sell ... It's getting emotional down here," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
Still, he cautioned: "The crop is not made yet." Rains in Texas since May have stoked expectations of lower abandonment and improved production, with many trade estimates in the range of 16-17 million bales for the country. A bumper US crop is expected to coincide with falling import demand in China, where the government is overhauling the stockpiling program it launched in 2011.
Even so, production is expected to drop in China, the world's top producer and consumer, and a weak monsoon in India has stoked worries over output in the No 2 producer. The spot ICE July contract ended down 0.03 cent, or 0.04 percent, at 74.97 cents a lb in its final day of trade, though the delivery notice period will continue into next week.
Sellers have offered up some 154,000 bales for delivery against the contract, the most recent ICE data showed. Exchange inventories again fell, sliding to 409,284 bales on Tuesday and down from last week's near one-year peak of 462,584 bales.