Cotton futures crumbled from relentless speculative sales to end lower Friday although trade buying pared the losses and analysts said they were uncertain about the market's direction next week.
The New York Board of Trade's benchmark May contract shed 0.22 cent to close at 54.49 cents a lb, dealing from 54 to 55.05 cents. July fell 0.25 to 55.75 cents. The rest were flat to 0.58 cent easier.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said speculative funds had dumped fibre contracts hard, but further losses were trimmed by robust trade and fixation buying in front of 54 cents, basis May.
"It's putting the bulls' feet to the fire," he said. "The path (of least resistance) is still down."
Cotton sank at the start when aggressive sales by speculators drove prices south, but brisk trade buying forced smaller speculators to cover their positions and sparked the market to hit its high for the session, dealers said.
But once the benchmark May contract faltered just above 55 cents, the market came under renewed pressure as speculative funds unloaded on cotton, they said.
"The specs really leaned on it, but the trade is there and you have tons of buying right at this level," one said. "The trade forced the market to back off near the close."
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said a breach of 54 cents in the May contract "could lead to another push toward the December low of 52.65 (cents)."
"With excessive players in the mix and open interest still quite high, we are dealing with the fallout of the recent bull run that requires more time to bottom and then stabilise," she added in a report.
Brokers Flanagan Trading Corp sees resistance in the May cotton contract at 54.70 and 55.10 cents, with support at 54.10 and 53.80 cents.
Floor dealers said final trading volume was estimated at 22,000 lots, from the prior count of 16,404 lots. Open interest rose 572 lots to 123,971 contracts as of March 2.
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