Cotton futures in New York dropped to their lowest price since December 2012 on Thursday after disappointing weekly US government export data sparked heavy selling in another day of volatile trade. The benchmark December cotton contract on ICE Futures US finished down 0.63 cent, or 0.8 percent, at 74.63 cents a lb after dropping over 2 percent to 73.71 cents a lb. US Agriculture Department (USDA) data showed that US exporters booked 27,700 bales of upland cotton in the week ended June 19.
Exporters sold 3,600 running bales of the remaining current 2013/14 crop. That was down 98 percent from the previous week and 96 percent from the prior four-week average, the USDA data showed. Sales were "abysmal," said Louis Rose, an independent cotton trader and consultant at Risk Analytics in Tennessee. "I don't know how bullish you can really be right now."
Fibre pared losses as investors bought on the session lows on expectations that low prices will stir fresh mill demand. The ICE December contract dipped further into technically oversold territory. Its 14-day relative strength index slipped to 27.7 from 29.4 previously.
Prices were poised for a weekly loss of about 3 percent. They hit over two-year highs in March as worries over tight US inventories at the end of the crop year that ends July 31 stirred waves of buying. The rally cooled after favourable rains showered drought-ridden growing regions in the United States, raising expectations of sharply higher output in 2014/15. Trading has been volatile all week as the July contract heads into delivery period. The spot contract lost more than 7 percent on Tuesday after falling by its daily limit on Monday.
On Thursday, it closed down 1.43 cents, or 1.7 percent, at 80.37 cents a lb in low volumes. The contract is poised to finish the week with its worst weekly loss since August. Exchange inventories rose to an 11-month high of 448,798 bales on Wednesday from 444,585 on Tuesday, ICE data showed. Total market open interest inched down to 144,552 lots from 145,458 lots previously, according to exchange data. That was the lowest level since late 2011.
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