NEW YORK: ICE cotton fell to a two-week low on Tuesday, pressured by limited mill buying, technical weakness, and forecasts of rains in drought-ridden Texas, the top producing state, that have alleviated worry over supplies in the world's top exporter.
The most-active December cotton contract on ICE Futures US edged down 0.73 cent, or 0.9 percent, to settle at 84.37 cents per lb after falling to 83.91 cents, the contract's weakest level since July 1.
"There's a lack of interest from mills, giving prices a chance to slip lower," said John Flanagan of Flanagan Trading Corp in North Carolina.
Demand from China, the world's top textile market, has supported global prices throughout much of the 2012/13 crop year that ends July 31, though recent data has shown the pace of China's voracious demand is slowing.
China's fiber imports totaled 269,800 tonnes last month, down more than 40 percent from June 2012, the China Cotton Association said.
The decline to recent lows has prompted higher inquiry levels and mill buying may pick up near the 83-cent level, dealers said.
December prices trended below key technical levels at the 50- and 100-day moving averages, now seen as resistance, adding weight to prices.
Forecasts of rains in Texas have damped cotton's upward momentum over the past several sessions, reducing concerns over new crop supplies after drought conditions helped propel a short-lived price rally of about 4 percent from June 25 to July 11.
Still, merchants expressed concern over available supplies in the United States in the new crop year, after planting delays and unfavorable weather.
Further, the largest July ICE delivery in at least five years was expected to significantly reduce exchange stocks.
Certified stocks totaled 541,000 bales, the most recent ICE data showed, down steeply from about 612,000 a week ago.
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