New York cotton touch softer

Cotton futures closed Tuesday with minor losses on steady speculative sales and the market may ease further in the days ahead, analysts said.
The New York Board of Trade's May cotton contract shed 0.30 cent to settle at 53.21 cents a lb, moving from 53.17 to 53.60 cents. July fell 0.25 to 54.52 cents. One contract aside, the rest lost 0.40 to 0.45 cent.
"The path of least resistance is down," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia. "It's a slow haemorrhaging (in cotton)."
Brown said on technical grounds, a fall in the May contract to below 53.10 cents meant it could slide further to 52.10 cents in the coming sessions.
A report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said textile mills "have been patient with their fixations and their persistence is paying with price levels not seen in over three months."
But as cotton prices continue to slide, "the odds increase exponentially of the Chinese government making a move to replace some of their strategic reserves or some other large purchase that will cement a low until well into summer."
China has become the world's biggest consumer of cotton and many analysts are cautiously waiting to see if their importers step into the market in a big way.
Futures lost ground at the start, but the speculative pressure ran into scale-down trade buying which again served to limit losses in the trading pit, dealers said.
"It just keeps slipping lower and lower, but the trade is not coming in hard and just picking up stuff on a scale-down basis," one said.
Industry players said they will be looking at the weekly export sales report from the US Department of Agriculture on Thursday and then turn their attention next week to the USDA's annual planting intentions report on March 31.
Broker Flanagan Trading Corp sees resistance in the May cotton contract at 53.30 and 53.80 cents, with support at 52.75 and 52.10 cents.
Floor dealers said final trading volume was estimated at 15,000 lots, from the prior count of 15,431 lots. Open interest rose 1,364 lots to 131,298 contracts as of March 20.