US cotton lost almost 2 percent to close down a second straight session on Friday as a weak stock market and economy mattered more to investors in the industrial commodity than a jump in weekly exports. The new benchmark contract for US cotton, May, settled down 0.81 cent at 44.10 cents per lb, trading from 45.40 to 43.91 cents.
March cotton, the market's previous benchmark, finished 0.39 cent down at 43.03 cents a lb. "We had friendly trade data today but cotton again became a victim of the stock market," said Keith Brown, principal at cotton traders Keith Brown and Co in Moultrie, Georgia. Wall Street's key stocks index, the Dow Jones industrial average, closed at a more than six-year low on fear that the government may end up nationalising some failing US banks if a rescue plan was not implemented on time.
"Cotton is an industrial commodity like copper and the depressing stock market and global economy are suffocating demand for everything, from rugs to new home wiring," Brown said. Weekly export sales of US cotton stood at just over 435,000 bales of cotton, up from the previous figure of over 109,000, data showed. With the outlook for commodities other than gold looking bleak and mirroring the stock market, analysts said they could not hold out much hope for cotton near-term.
"Weather issues, though troublesome, are not yet critical, so any friendly help is a few weeks away," Sharon Johnson, cotton analyst at First Capitol Group in Atlanta, said. Volume in May cotton stood at 7,600 contracts by 4:55 pm EST (2155 GMT), versus the late Thursday afternoon tally of 6,479 contracts.
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