New York cotton futures at 11-week low

NYCE cotton futures closed at an 11-week low Tuesday on speculative fund sales which touched off automatic sell-orders in a technical breakdown which could cause further losses this week, analysts said.
March sank the 3.00-cent limit to finish at 64.96 cents a lb, with the session peak at 67.90. It was the lowest close for cotton on the spot charts since trading near 62.50 in late November 2003.
May also lost the 3.00-cent limit to 67.27 cents. Except for one contract, the rest fell 1.33 to 1.55.
Sharon Johnson, cotton expert for Frank Schneider and Co Inc in Atlanta, said that once March slid below its recent low of 67.09, the funds aggressively dumped contracts.
"When they took out those lows, it was Katie-bar-the-door," she said in alluding to the robust liquidation engaged in by fund and speculative accounts.
Analysts said the market did not get any kind of support from the monthly USDA supply/demand report since the data came in within trade expectations, providing no bullish news on which traders would buy.
Market players were only expecting small changes, if at all, in the USDA report and that is precisely what they got.
USDA kept its estimates of US cotton production, exports and ending stocks unchanged at 18.22 million (480-lb) bales, 13.2 million and 4.25 million bales, respectively, in the 2003/04 marketing year (August/July).
World cotton production rose to 92.65 million from last month's 92.20 million, consumption edged up to 97.24 million from 97.11 million, and ending stocks went up to 32.49 million from 32.36 million bales.
"That's about as neutral a report as you can get," said John Flanagan, president of brokers Flanagan Trading Corp in North Carolina.
Analysts said the poor close meant cotton would likely push lower tomorrow to test areas of support at 64 cents or lower. Resistance was forecast at 65 and then 66 cents.
Floor dealers said estimated final volume reached 33,000 lots, compared to the prior tally of 21,861 lots. Open interest fell 2,159 lots to 82,786 lots as of February 9.