NYBOT cotton futures finished easier Monday on speculative sales, with the trade apparently betting a key government report tomorrow will be bearish, analysts said.
December cotton dropped 0.83 cent to settle at 46.52 cents a lb, dealing from 46.40 to 47.40 cents. March lost 0.77 cent to 48.60 cents and, aside from one contract, distant months fell 0.60 cent.
"The market has been defensive all day long in anticipation of a bearish report tomorrow," said Mike Stevens of Swiss Financial Services in Mandeville, Louisiana.
The analyst was referring to the monthly US Department of Agriculture supply/demand report due out Tuesday at 8:30 am EDT (1230 GMT) which will contain its latest forecast on world cotton production and consumption.
Dealers feel the world must still contend with large crops in all the major producers, with the US expected to harvest a record crop of over 20 million (480-lb) bales in 2004/05.
The trade expects only small changes in the estimate for world cotton production, which the USDA pegged last month at 107.25 million bales. World consumption was at 100.85 million bales, according to USDA data.
The brokers said a cut in the estimate of the cotton crop in China, the world's largest consumer of cotton, will likely be offset by a rise in the harvest of other major producers like India and Pakistan.
Speculative sales kept the market under pressure with only small amounts of trade buying keeping futures from falling completely out of bed, the brokers said.
"The specs kept pushing it down, but there seems to be export business whenever we go below 46.50 (cents, basis December)," one explained.
Brokers Flanagan Trading Corp pegged support for December delivery at 46.35 and 45.50 cents with resistance at 47.10 and 47.75 cents.
Floor dealers pegged estimated final volume at 5,000 lots, up from Friday's count of 4,203 contracts. Open interest declined 158 lots to 71,599 lots as of October 8.
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