Cotton futures ended lower Thursday on speculative sales and the market is seen coming under further pressure due to the imminent harvest of a huge cotton crop in the United States, brokers said.
The New York Board of Trade's December cotton contract retreated 0.44 cent to finish at 49.50 cents a lb, moving between 49.38 and 49.94 cents. March eased 0.27 cent to 51.48 cents. The rest lost 0.23 to 0.56 cent.
"The seasonal tendency is for it (cotton prices) to go down," said Jobe Moss, an analyst for broker and merchant MCM Inc in Lubbock, Texas.
He forecast that futures will likely wilt from the pressure of the harvest and should grind lower in the days ahead.
The size of the crop was illustrated in the recent US Department of Agriculture monthly supply/demand report for September which forecast the 2005/06 US cotton crop at 22.28 million (480-lb) bales.
In August, USDA pegged the US crop at 21.29 million bales. In the 2004/05 season, the harvest hit a record 23.25 million harvested bales
The USDA's weekly export sales report was given a muted reaction by market participants.
USDA said US cotton sales amounted to 130,500 running bales (RBs, 500-lbs each), below trade belief it may range from 250,000 to 350,000 RBs.
US cotton shipments of previously booked orders hit 181,000 RBs, vs. trade belief it would range from 250,000 to 300,000 RBs.
Moss said the market could be in trouble if demand begins to soften due if the spiral in crude prices dents consumer demand for cotton.
Brokers Flanagan Trading Corp sees resistance in the December cotton contract at 49.90 and 50.65 cents, with support at 49.10 and 48.20 cents.
Floor dealers said estimated volume hit 7,000 lots, vs. the previous tally of 7,411 contracts. Open interest fell 166 lots to 104,405 lots as of September 14.
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