Cotton futures drop as speculator selling resumes, offsets mill buying

ICE cotton slipped again on Tuesday, resuming the market's biggest rout in years as speculators resumed selling fibre amid concerns about growing oversupply and offsetting pockets of buying as mills chased bargains. The benchmark December cotton contract on ICE Futures US settled down 0.55 cent, or 0.8 percent, at 67.75 cents a lb. Volumes were lower than recent sessions.
Prices were just above the two-year low of 67.1 cents touched on Friday after the US Department of Agriculture forecast another record surplus in the upcoming season that starts on August 1, warning of falling demand and rising output. The market also digested data from China that showed a 19-percent year-on-year drop in imports last month as the government continued to auction off its state reserves. Even so, the plunging prices have triggered renewed interest from mills across the globe, traders said. INTL FCStone analyst Andy Ryan said he had heard of "robust" buying from Turkey to Southeast Asia. "It's gotten so cheap, so fast," he said.