Cotton futures ended easier Tuesday amid a steady barrage of speculative sales, and the should gradually decline from fund pressure and the onset of the cotton harvest in the United States, brokers said.
New York Board of Trade's December cotton slumped 1.40 cents to finish at 49.80 cents a lb, dealing from 49.55 to 50.85 cents. March fell 1.22 to 51.43 cents and the rest sank 1.07 to 1.23 cents.
Sharon Johnson, cotton expert for First Capitol Group in Roswell, Georgia. said the combination of speculative pressure and the coming harvest here will eventually deflate the contract and a probe of its recent low of 48 cents is likely as early as next week.
Analysts said the market will likely come under increasing pressure in the days ahead as speculators opt to liquidate their long positions in the market.
Fundamentally, American farmers are also about to harvest another massive cotton crop.
The US Department of Agriculture's monthly supply/demand report for September showed the 2005/06 US cotton crop at 22.28 million (480-lb) bales, up from August's 21.29 million bales estimate but down from the record 23.25 million harvested in 2004/05.
"There were a lot of spec sales and no quality buying until (we got) below 50 cents (basis December)," said Johnson.
The market took note of news that US Agriculture Secretary Mike Johanns said Tuesday that the port of New Orleans should be in good shape to handle the export of agricultural products.
The cotton harvest in the US Delta is about to get under way in the coming weeks.
Traders said resistance in the December contract lurks at 49.90 and 50.65 cents, with support at 49 cents.
Floor dealers said estimated volume hit 11,000 lots, up from Monday's tally of 8,500 contracts. Open interest rose 245 lots to 105,632 lots as of September 12.
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